Why Türkiye Is a Prime Opportunity for eCommerce

PYMNTS interviews Worldline’s Guillaume Tournand, vice president of growth and digital commerce, and Michael Bilotta, head of digital services, about what makes the Turkish eCommerce market a unique investment prospect.

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Türkiye’s economy is a unique blend of old and new, where legacy payment methods butt against modern eCommerce and digital conveniences. While half of Türkiye’s 85 million consumers are under the age of 30 and smartphone penetration hovers around 80%, a full 90% of transactions are still conducted solely in cash. This is changing fast, however.

“The consumers are guiding the market to a large extent,” Bilotta said in a recent PYMNTS interview. “What you see is that because it’s a young population, they’re becoming more and more sophisticated. They’re the ones who are starting to guide this.”

Local eCommerce has been growing at incredible speed in recent years, but the ongoing pandemic kicked the market into overdrive. The 2010s saw eCommerce growth hit a compound annual growth rate (CAGR) of 40%, but starting in March 2020, this skyrocketed to 75% as social distancing and stay-at-home orders forced a record number of retailers online for the first time.

“The tremendous growth that we’ve seen in markets like Türkiye is significantly higher than what we can see in Europe or the U.S.,” Tournand told PYMNTS.

International retailers are leaping at the opportunity to capitalize on this growth, but they must reckon with the unique characteristics of the Turkish market to make the most of this opening. Loyalty programs are one such example, with Turkish consumers who use digital wallets preferring to stay loyal to a single entity to maximize their rewards potential.

“One of the interesting things about Türkiye is closed-loop loyalty programs,” Bilotta said. “There’s a huge prevalence of these different loyalty programs based on the supermarkets [where consumers] shop, and coffee shops, and there are these digital wallets that are centered around these loyalty programs. Those are all local.”

Incorporating local spending and payment habits in an eCommerce push will be critical for any company looking to enter the Turkish market. This can be much easier said than done for any single company, which is why many feel they are best served by partnering with third-party payments service providers to handle that work for them.

“The benefit is to provide [payments] services at scale so that [merchants] can access the market immediately without needing to work with another local [payment service provider],” said Tournand.