Friday, October 05, 2012

The Accel 5 Mantras of Ecommerce in Turkey

I was lucky to enjoy the sun, warmth and excitement of Istanbul in the past couple of days to attend the Webrazzi Summit, which is the poster child of Turkey’s vibrant start-up scene. I have been to Turley several times in the past 18 months, and find the region very exciting. There is a lot to like in this country with a large and fast growing internet market still very underpenetrated:
  • Strong macroeconomic trends with a 2011 GDP growth of 8.1% and a GDP per capita which grew from $6k in 2001 to $14k in 2011
  • Good infrastructure with 38m internet users (5th European country), mobile penetration above 90% and a very strong logistics and payment networks (45m+ credit cards)
  • Very attractive demographics with half of the population below 30 year-old and very active online (5th country on Facebook, 8th on Twitter)
As you can see, I am Istanbul-lish!

Being invited to speak at the conference, I decided to present some of the things that Accel learned after speaking to dozens of internet and ecommerce companies in the region. I summarized these learnings into 5 “Mantras” that are developed in the presentation embedded below:
  1. “Me too” is not enough: don’t be the 50th private shopping club or Groupon clone. There is no room for you in the market. Think “differentiation”
  2. eCommerce is not a cheap journey: be prepared! Most successful ecommerce companies raise more than $50m during their lifetime, so watch every penny you spend and pay specific attention to (1) Inventory and working capital and (2) marketing costs (in particular a repeat basket is not free!)
  3. Run your business with numbers: eCommerce is all about numbers and doing a 100 small things right
  4. Build your brand by focusing on user experience: a strong brand is necessary to reduce your CAC and increase your profitability and the best way to build it is to focus on providing a great user experience (product, service and payments)
  5. Mobile will be bigger than you think: mobile will represent 20%+ of you sales before you realize it!