A group of Gulf investors has bought a 88 million Euro stake in Turkey’s largest online retailer, prompted largely by growing investor interest in the country’s youth population. Abraaj Capital, a Dubai-based private equity group, has acquired 25 percent of Hepsiburada, in a deal that’s calculated to be worth around 350 million Euros.
Fifty percent of Turkey’s 76-million strong population is under 30, making Turks one of most youthful countries in the world. Young Turks are also becoming better educated, and this is resulting in a demographic that’s increasingly internet-savvy and switched on. It’s inevitable that investors are keen to tap into this demographic.
Turkey’s Amazon.comHepsiburada, which translates to “it’s all here”, makes no secret of the fact it wants to be the Amazon.com of Turkey, and its well on its way: last year the company reported TL1bn (around 35 million Euro) worth of sales, and reported 14 million unique visitors each month - roughly a third of Turkey’s online population.
The company is 25 times bigger than it was in 1999 when the Dogan family bought the company from its predecessor and transformed it into an online giant. Hepsiburada patriarch Aydin Dogan is thought to be worth 97 million Euros, and his daughter Hanzade Dogan Boyner, is the company’s chairwoman.
Hanzade Dogan Boyner said the group had been seeking a partner for three years, and while Turkey remains the first priority, with Abraaj on board the company will consider expansion in the future.
She added that Hepsiburada is a company “Turkey should be proud of - in most countries the ecommerce market is dominated by international players; we have managed to get the leadership in a sizeable market.”
Abraaj’s stake in TurkeyIstanbul-based Hepsiburada is the latest in a string of investments by Abraaj, and the first from a 442 million Euro fund set up specifically for Turkish investment. Abraaj has invested 747 million Euro in Turkey since 2007.
The latest investment will be used to expand Hepsiburada’s operations and improve the company’s infrastructure, including its network of warehouses and its mobile platform.
The Dubai-based company says Hepsiburada is the biggest e-commerce player by revenue in Eastern Europe, the Middle East, Africa and Russia.
Abraaj spokesperson Selcuk Yorgancioglu said Turkey’s online retail sector has been growing seven times faster than store-based retail since 2007 - and it was time that the online sector received a boost.
The future of onlineCompared to other emerging markets, Turkey’s internet usage and online retailing have some way to go, but experts believe Turkey’s youthful, educated population will drive rapid growth. Market research firm Euromarket International is forecasting revenues to more than double by 2017, hitting 5.8 billion Euros.
It’s little wonder foreign investment in the online sector has ramped up.
The Hepsiburada deal is the latest in a line of online-oriented acquisitions in Turkey, with investments from South African company Naspers, eBay and Amazon.com, who bought a minority stake in an online gift shop in Turkey.
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