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In 2020, Turkey was the 11th largest eCommerce market in Europe. With 53 million online shoppers predicted in Turkey by 2024, it’s no surprise that cross-border sellers are interested in the market. However, in order to succeed there, business owners must first learn about the country’s eCommerce infrastructure and cater to the preferences of local customers.
Why Start an Online Business in Turkey?
As a result of the COVID-19 online sales surge, smart marketers are eyeing Turkey as an undiscovered source of outstanding sales development. Turkey has only 44% eCommerce penetration, with the majority of it centered in the western and central areas of the nation. That means there’s still lots of room for profitably growing and substantially scaling online sales in Turkey’s e-commerce business.
As mentioned, Turkey has become an enticing destination for outside business visionaries looking to contribute and expand their businesses internationally. The main motivations for investing in Turkey are the country’s strategic location between Europe and Asia, a young and well-prepared workforce, and a friendly business environment. Moreover, In comparison to the entire multi-decade, the volume of remote interests in Turkey has increased 8.5 times, and this nation has become a developing commercial sector, similar to the BRIC countries –Brazil, Russia, India, and China.
Istanbul, Turkey’s primary city, has attracted some international interest in recent years as a result of its strategic location as the world’s only city spanning two continents – Asia and Europe, as well as its excellent infrastructure and well-trained workforce. Speculators also choose Ankara (the capital city), Izmir, and Bursa for establishing businesses because they are Turkey’s most developed and largest cities. Here are a few quick reasons to choose Turkey as the new business arrangement location:
Motivations by the Turkish government: By lowering venture-related costs and creating a more speculator-friendly environment, the Turkish government is strengthening both local and remote financial specialists.
Low Operation Costs: One of the benefits of starting an online business in Turkey is the low operating costs. While establishing a business in another country, such as the United Kingdom or the United States, may cost you a fortune, Turkey offers a unique opportunity.
Consumer Spending: Another benefit of Turkey’s young population is the amount of money they spend. Youngsters enjoy following trends, they have their favorite brands, and they enjoy spending money without a care.
Steps to Start an Online Business in Turkey
Before you begin any type of business activity in Turkey, you must first get a trademark and domain name for the online business you intend to launch. Working with trademark solicitors who are registered with the Turkish Patent and Trade Mark Office can help you achieve this.
The next step after you have applied for trademark registration for your e-commerce business in Turkey, you can register a domain name ending in “.com.tr” through this website. You will be able to register “com.tr” domain names only through this website. To prove that you have any form of legal relationship to the domain name you’re trying to get, you’ll need to show proof of trademark application to nic.tr. If all you want is a “.com” domain, you can choose whichever service you want.
After you’ve finished this step, you may begin setting up your business. a professional and good-looking website on your own server or on a professional platform such as WordPress or Shopify is the foundation of your online business. You can count on Ounternet to create a tailormade website or platform that will answer your every need. With a team of professional experts, you will have a web platform that is fully functional and able to attract new leads.
Please double-check that your website contains all of the information listed below:
- Name of the business.
- Name and contact information of the publishing director.
- Tax number or Trade Registry number
- The registered office’s address (HQ).
- Phone number and e-mail address
- Registered KEP address (Registered E-mail System to allow for legal notices).
- Trademarks and commercial names.
- Mersis number (legal entities ID in Turkey).
Obligations of online businesses in Turkey
The requirements of online sellers in Turkey are one of the most essential sections of the new E-commerce Law. These are essential for the e-commerce platform to display the following information:
- a genuine business address for the company;
- the name of the company that manages the website;
- and the company’s tax number
Moreover, once a client accesses the platform, the website must have an email address and phone number, as well as the general terms and conditions available to visit. Personal information obtained from clients must also be protected, which requires the application of security mechanisms.
Suggestions for Turkish e-commerce businesses
Because there are so many financial institutions in Turkey that provide merchant accounts, it is now a logical step to take when starting an e-commerce business. When clients request contracts, internet stores should employ both electronic and traditional written contracts.
Those looking to build a brand out of their e-commerce enterprises should also register the domain name as a trademark.
Turkish Taxation and Regulations
Turkey is concerned about privacy and data protection, enacting The Data Protection Law in 2016. The law defines a structure that is similar to the European Data Protection Directive and has evolved in tandem with the GDPR. The KVKK and the Board are designated as the supervisory authorities in charge of enforcing the law and safeguarding personal data protection.
Any merchant selling in the country, including cross-border sales, is subject to the Data Protection Law. Before joining the Turkish eCommerce sector, it is suggested that enterprises seek legal advice.
Turkey levies an 18 percent VAT (value-added tax, or goods and services tax) on taxable goods and services, with lower rates of 8% for basic foods, medical supplies, and certain services, and 1% for agricultural products and machinery and equipment obtained through finance leases. Printed books, periodicals, and newspapers are VAT-free, however, online sales of the same items are subject to the regular rate of VAT.
Even if they just make one sale to Turkish residents, merchants must register with the Turkish Tax Authority (‘Revenue Administration’).
The earnings gained from digital services delivered in Turkey may be subject to a 7.5 percent digital services tax (DST). Again, hiring a financial expert is recommended to guarantee that your company complies with all VAT regulations.
How do shoppers in Turkey prefer to shop?
Turkey has one of the highest rates of social media adoption and usage in the world, at 63 percent. By 2025, it is predicted to have grown to 82.4 percent and over 71 million users.
In Turkey, social media plays a significant part in the eCommerce purchasing process. Even if they finalize the transaction on their desktop, many consumers start their journey on applications like Pinterest, YouTube, and Instagram.
Therefore, having professional social media and targeted ads to get customers and sales online is a must for any online business in Turkey. Our Social Media Marketing experts will develop the best strategy for your online presence on social media to gain more customers and generate sales.
How do shoppers in Turkey prefer to pay?
Nearly three-quarters (74%) of all eCommerce purchases in Turkey are made using a debit, credit, or pre-paid card. With 1.63 debit cards, 77 credit cards, and 2.4 total cards per capita, Turkey has one of the highest card penetration rates in the world.
The government and the banking industry are planning to make Turkey cashless by 2023, as well as fintech advances, have resulted in a huge increase in this rate. Troy, QR-code-based payments, new digital wallets, and pre-paid debit cards are examples of new payment systems that are aimed to enhance cashless purchases.
Consumers in Turkey also prefer installment payments. Deferred payments (installments) account for 8% of all transactions. While card payments will continue to dominate online commerce, digital wallet transactions are expected to increase from 6% to 10% by 2023.
The important thing for merchants to understand is that, while Turkish consumers are enthusiastic about online shopping, they also value having a variety of payment alternatives, up to five, and favor installment purchases and particular local payment techniques.
Debit/credit/prepaid card payments accounted for 74% of total payments in 2019-2020. The remainder was split between bank transfers, cash, and digital wallets, accounting for 12 percent, 7%, and 6% of all eCommerce transactions, respectively.
To suit all of the many tastes, merchants should select local favorites like Visa or Mastercard, BKM Express, iyzico, and Papara.
The most popular turkey online payment methods are as follows:
- International Credit and debit cards. In Turkey, Visa, Mastercard, and other international bank cards such as Troy Card accounted for 74% of all eCommerce purchases in 2019.
- Troy Card from BKM. The Troy card was introduced in 2016 as an alternative to Visa and Mastercard by the Interbank Card Center (BKM). More than two million Troy cards were in circulation as of 2017, and 40 percent of Turkish merchants accept them.
- BKM Express is a company that specializes in providing transportation services. With 1.6 million users and 21% of the non-cash payment market, this is Turkey’s oldest and most popular digital wallet. BKM Express is a public-private partnership with close ties to all 19 banks in the country. Consumers can utilize their digital wallets for in-store and peer-to-peer payments using the company’s mCommerce and eCommerce features.
- Bank transfer. Because the Turkish government is encouraging it and it has lower costs, netbanking is a serious competitor to Visa and Mastercard. The shopper is referred to their bank at checkout to confirm their merchant payment through Netbanking, or via QR-code-based systems like Union Pay, where the shopper initiates and completes the bank transfer via their mobile device.
- Installment payment credit cards (Bonus Card, Worldcard, CardFinans, and others) are popular among Turkish online customers, so make sure to include them in your checkout. According to research, utilizing installment cards in Turkey leads to 4x more coverts than other methods.
- Popular Loyalty Programs for Credit Cards. Bonus Card from Garanti, Worldcard from Yapi Kredi World, CardFinans from QNB Finansbank, paraf card, or Maximum Card from Turkiye Bankasipopular are all installment card programs available for online businesses.
- Other Types of Digital Wallets. New digital wallet providers such as iyzico, Yapikredi, and Papara have millions of users and are swiftly gaining traction. Digital wallets, like cash on delivery, do not require the user to have a bank account and are less vulnerable to fraud than bank cards.
Final Thoughts: Begin Your Successful Online Business in Turkey
As online businesses continue to grow in popularity and become the preferred way of payment for more and more people around the world, cross-border merchants are in a great position to start selling in nations like Turkey.
Despite the fact that there are definite preferences to consider, which vary by country and region, as well as legal considerations, businesses stand to benefit greatly from exploring these new cross-border markets in order to extend their business reach and revenues.
Have in mind that the Ounternet team will offer you the full services you require to kickstart your online business in Turkey; services such as web development, application development, business strategy, online campaign and ads, content creation, promotional content, and more. Let’s talk about your goals today!
