Amazon Türkiye SME E-Commerce Outlook 2023 Report surveyed over 2,000 SMEs across Türkiye to better understand the needs and challenges they face regarding entry into both domestic and foreign markets via online channels. The survey findings reveal that even though e-commerce is currently nascent across Türkiye in comparison to more mature channels, e-commerce is poised to take off, driven by growing internet penetration and increased availability of quality online products. In line with countrywide business statistics regarding e-commerce, 25.3% of Turkish SMEs who were surveyed for the report stated that they are engaging in e-commerce activities, while 19% are planning to start engaging in e-commerce in the upcoming period, indicating that a significant share of businesses is ready to amplify their current operations by seizing the opportunities online.
The report was presented at an event at Feriye Palace, Istanbul. Attending were Amazon Türkiye Country Manager Richard Marriott; Amazon Türkiye Marketplace General Manager Ediz Habip; PwC Türkiye Territory Senior Partner Cenk Ulu; Turkish Industry and Business Association President of the Board of Directors Orhan Turan; Turkish Enterprise and Business Confederation Vice President of the Board of Directors Öner Çelebi; Informatics Industry Association President of the Board of Directors Mehmet Ali Tombalak; and a successful women-owned Turkish SME, Hülya İmer, founder of Mara Cosmetics.
The penetration rate of e-exporting among Turkish SMEs is at a modest level
While an overview of the domestic and foreign distribution of e-commerce activities in Türkiye unsurprisingly highlights the significant role of domestic trade, there has been a gradual yet small increase in cross-border interactions. According to the report findings, a modest level of SMEs in Türkiye have engaged in e-exports, with only 4.1% of surveyed SMEs stating they have incorporated e-exporting into their businesses. This statistic is a valuable insight into larger e-exporting patterns among SMEs in Türkiye, suggesting that the penetration rate of e-exporting among SMEs is currently low, while signalling that there are further opportunities for engagement in this regard.
Lack of know-how is the most significant barrier to e-exporting
The Amazon Türkiye SME E-Commerce Outlook 2023 Report reveals that for Turkish SMEs, the main reason behind not engaging in e-export activities is lack of know-how, as 76.8% of the surveyed SMEs stated they do not have enough knowledge of what e-exporting is and how to engage in it, and only 23.2% stated they are acquainted with e-exporting terms. Turkish SMEs who are familiar with e-exporting are still hesitant to engage in e-commerce and e-exporting due to information asymmetry regarding sectors and markets abroad, as well as inadequate technical infrastructure. 55% of the Turkish SMEs surveyed stated that the lack of market and sector knowledge is the biggest challenge that restricts their ability to conduct cross-border e-commerce. Furthermore, 43% of these same participants believe they have insufficient customer service processes that are unable to cater to an international audience, especially with regard to after-sales, while 30% abstain due to lack of access to adequate logistics.
While lack of know-how emerges as the biggest barrier to e-exporting for Turkish SMEs, their e-export transaction volume has been gradually increasing since 2019. The increase in generated income encourages e-exporting SMEs to further incorporate this sales channel into their future goals and strategies. According to the report, 47% of SMEs believe that their level of e-exports will stay the same, 35% believe that their e-export transaction volume will increase in the future, and none of the SMEs believe that their e-export sales will decrease. This is an indication that SMEs may not have the means or the knowledge to increase their e-export volume, however, pursuing strategies such as collaborating with online marketplaces which have a wider customer base and reach into other markets would allow them to achieve this.
Online marketplaces are the predominant choice for e-exporting
According to the research findings, the overwhelming majority (71%) of Turkish SMEs opt to use marketplaces and marketplace operators to conduct their e-commerce and e-exporting activities in order to leverage the benefits they provide. Of the Turkish SMEs who participated in the survey, those who e-export through online marketplaces and marketplace operators emphasise that marketplaces are useful for acquiring new customers through marketing and promotion (48%), cost efficiencies regarding logistics and transportation (43%), generating brand visibility (42%), and enabling enhanced and reliable customer service through efficient communication channels (38%).
Social & mobile commerce is on the rise while consumer values are shifting
The Amazon Türkiye SME E-Commerce Outlook 2023 Report also reveals important insights into the recent trends influencing Türkiye’s e-commerce and e-exporting activities, as well as shifting consumer behaviours and expectations. According to the findings, in line with global trends, social commerce is significantly on the rise in Türkiye, particularly among the Gen Z population. In Türkiye, as of the first six months of 2022, around 76% of e-commerce transactions are conducted on mobile devices. This places Türkiye ahead of the world average, where mobile commerce accounts for 72.9% of e-commerce.
While the rise in online retail demand has led to significant growth in e-commerce in Türkiye, consumers are also becoming more selective, particularly in terms of delivery length and methods, while opting more and more for socially and environmentally responsible brands. Free delivery (62.3%) and easy returns (51.9%) emerge as the most important online purchase drivers in Türkiye, and the concept of sustainability has become a prominent issue for consumers, playing a role in influencing their purchasing decisions - the amount of packaging becoming a particularly important consideration when shopping. The social dimension of the supply chain, such as the working conditions of factory and shipping personnel, as well as ethical and fair production processes are also factored into the decision-making process when shopping, as the rise of social media has allowed consumers to gain detailed insights into the production processes of brands, and with increased visibility, consumers have begun to expect accountability.
Amazon Türkiye is committed to the success of Turkish SMEs
The following are remarks from our Selling Partners:
Speaking at the event in Istanbul, Richard Marriott, Country Manager, Amazon Türkiye said: "SMEs play a vital role for Türkiye's economic development. They create jobs, foster innovation and contribute significantly to Türkiye’s GDP. At Amazon, since our launch, one of our main priorities has been supporting Turkish SMEs via numerous tools, services and training programs we offer to them. And the result continues to pay off for sellers and customers.
“The number of Turkish SMEs selling on Amazon increased by more than 50% in 2022 and reached over 45,000. The export sales of SMEs increased by over 60% in 2022 compared to the previous year and recorded around 500 million euros. However, it is important to recognise that SMEs face a number of challenges. It is crucial to address these challenges and create an enabling environment for SMEs to grow and reach their true potential. That is why we partnered with PwC Türkiye for this research as a further commitment to Turkish SMEs. We wanted to understand more about the challenges they face, barriers in their growth journey and how we can best position ourselves to help them grow and expand beyond borders.
“The research surveyed over 2,000 SMEs across the country and provided a very useful picture of the strengths and pain points SMEs face in their online journeys. We are taking the feedback we received from SMEs and the results of the research as guidance to how we can further support Turkish SMEs in their e-commerce journey.”