Alibaba Group Holding Ltd. has unveiled ambitious plans to invest $2 billion in Turkey, marking a significant commitment to the country’s burgeoning e-commerce landscape. The announcement came after a meeting between Alibaba’s CEO, Michael Evans, and President Recep Tayyip Erdogan in Istanbul, according to a statement from Trendyol, Alibaba’s Turkish unit.
Michael Evans expressed strong confidence in Turkey’s robust economic fundamentals during the meeting, emphasising the country’s potential for becoming a major player in e-commerce exports. He disclosed that Alibaba has already invested $1.4 billion in Turkey through Trendyol, which stands as the nation’s largest e-commerce marketplace.
While specifics about the investment timeline were not provided, Michael Evans outlined the broad scope of Alibaba’s plans, which include the establishment of a world-class data centre, a logistics hub in Ankara, and a market-leading export operations centre at Istanbul Airport.
Trendyol, in which Alibaba holds a substantial 76.1% stake, achieved a remarkable valuation of $16.5 billion in 2021, attracting investments from prominent backers like SoftBank Group, General Atlantic, Qatar Investment Authority, and Abu Dhabi sovereign fund ADQ.
The Turkish government initiated an antitrust investigation into Trendyol in 2021, a move reflecting the growing scrutiny of e-commerce platforms. In July, Turkey’s Constitutional Court upheld legislation that tightened regulations on e-commerce companies, a decision that posed challenges for Trendyol and its peers.
The law, which imposes restrictions on advertising expenditure and the use of customer data for companies with sales exceeding specified thresholds, was deemed constitutional by the court, rejecting objections from the main opposition party. The legislative changes were aimed at levelling the playing field for smaller e-commerce players in the wake of the sector’s rapid expansion during the pandemic.
However, in a separate development, Turkey’s Antitrust Board imposed a significant fine of 61.3 million Turkish liras ($2.3 million) on Trendyol for allegedly utilising third-party vendors’ data to gain an unfair competitive advantage in its retail operations.
Turkey’s e-commerce sector has experienced remarkable growth, with the total e-commerce volume surging by 109% in the previous year, exceeding 800 billion Turkish liras. This data, reported by the Trade Ministry, underscores the increasing significance of online shopping, which now accounts for nearly one-fifth of all retail transactions in the country.
Alibaba’s substantial investment underscores the company’s faith in Turkey’s economic prospects and the potential for further expansion in a rapidly evolving e-commerce market.
Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.