• Turkey Market Overview
TURKEY
MARKET
OVERVIEW
Agenda
1 Methodology of Research
2 Overview of Turkey
3 Survey Main Findings
Methodology of Research
Methodology
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Phase 1: Preliminary Desk Research
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Match supply capabilities with Import behaviour of Turkey
Shortlist potential products
Appoint Consultant
Phase 2: Fieldwork
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Collection of Samples (20 products used)
Face to Face Interviews 3 – 12 December 2012
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Importers
Chamber of Commerce and Associations of Food importers, Shoe Manufacturers, Ship Models
Regulatory body: Halal Certification Body
Mystery shopping
Phase 3: Reporting and Disseminating Main Findings
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Workshop
Report on Website, in EM’s Knowledge Centre
Fieldwork - Samples used
Product Category
Food & Beverages
Textile & Apparel
Others
Targeted Products
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Special sugars, sugar cubes,
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Jams,
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Tuna (canned, in pouch), frozen tuna,
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Fruit paste,
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Rum, agricultural rum,
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Spices,
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Instant noodle,
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Honey,
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Bakers’ wafers & wafers,
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Pickles
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Pineapples,
Denim Fabric, Coloured denim fabrics,
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Cut flowers
Polo shirts,
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denim garments,
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Men’s short of cotton,
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Twill garments,
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Kidswear
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T-shirts,
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Lingerie,
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Swimwear
Shoes (including medical shoes)
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Leather products and accessories,
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Sunglasses, frames and mountings for spectacles
Fieldwork – 22 Face to Face Meetings conducted
Sector
Companies / Institutions
Chamber of Commerce
Istanbul Chamber of Commerce
Alcohol Manufacturer
Arag,
Food Importers Association
Tugider
Halal Association
Gimdes (Halal Certification Body)
Food and Beverages
Vizyon, Cekok, Alfarm, Mevsim, Verita and Dolfin
Footwear
Turkish Footwear Industrialists Association
Textile
Uteks, Cerit, Denim Global, Renteks, Dogan Moda, Global Denim, Macin,
Nayman and ZAP Group
Ship Models
Ship Modellers Association (Gemi Modelcileri Dernegi)
Spectacles and sunglasses
Merve Optik
Fieldwork - Mystery Shopping for Agro Products
• Objectives:
– collect retail prices of potential competitors for Jam, Noodles, Honey,
Tuna, Canned Fruits and Liquor.
• Retail Stores Surveyed:
– Carrefour
– Macro Centre,
– MMM Migros
Overview of Turkey
Turkey on the Map
Turkey Facts
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Full name: Republic of Turkey
Population: 73.6million
Capital: Ankara
Largest city: Istanbul
Area: 779,452 sq km (300,948 sq miles)
Major language: Turkish
Major religion: Islam
Life expectancy: 72 years (men), 77 years (women)
Monetary unit: Turkish lira
Internet domain: .tr
International dialling code: +90
Economic Overview
• Turkey is World’s 17th largest economy
• GDP per capita: $14,400
• GDP real growth rate: 8.5% in 2011, but 2,2% (2012)
• Inflation: 6.5%
• Major industries: textiles, food processing, autos, electronics, mining
(coal, chromate, copper, boron), steel, petroleum, construction, lumber,
paper.
• Unemployment rate: 9.8%
Political Overview
• Turkey is in EU Accession Negotiotations, since 2005
• Parlamentary System
• Politically stable country
• Strong one party rule for the last decade – Justice and Development Part
(center-right, conservative)
• Next Elections 2015
Population Structure
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Youngest population in Europe; Average age is 29
1.8m Students graduate each year
The young population is image conscious and brand aware
67m GSM Users
Foreign Trade
Exports
Imports
$143.4 billion
$232.9 billion
Exports - commodities: apparel,
foodstuffs, textiles, metal
manufactures, transport equipment
Imports - commodities: machinery,
chemicals, semi-finished goods,
fuels, transport equipment
Exports - partners: Germany 10.3%,
Iraq 6.2%, UK 6%, Italy 5.8%, France
5%, Russia 4.4%
Imports - partners: Russia 9.9%,
Germany 9.5%, China 9%, US 6.7%,
Italy 5.6%, Iran 5.2%
Economic Benchmarks
• Corporate Tax 20 %
• VAT 18 % ( two reduced rates 8% & 1%)
• Basic Monthly Salary – 978 TL ( approx. 515 USD)
• Law: derived from various European systems, mainly French, Italian, and
Swiss. The Turkish court system does not include the concept of jury.
Verdicts are reached by a panel of judges
Turkish Bluechips
Business Climate I
• Bridging Europe and Asia, Turkey is located in the heart of the Eurasia
region catering to a profitable market.
• Turkey is a springboard to enter alternative markets such as the Balkan
markets including Bulgaria, Macedonia, Romania; former Soviet Union
markets like Azerbaijan, Kazakhstan, Turkmenistan as well as neighbouring
countries like Iraq, Iran and Georgia. It means tapping a total market
estimated at 220 million inhabitants.
• It is traditional, but also modern; multicultural and techologically
advanced market.
Business Climate II
• Business people are open minded and definetely open for international
contacts
• It is a vibrant economy and an emerging market
• Bureaucracy can be an issue in certain cases, specifically when dealing
with the Government for various permits and licences
• Good infrastructure exists, but Traffic is an issue. Moving from one
meeting to another in Istanbul, can easily take an hour if not more.
Why do business in Turkey?
• Steady growth over the last eight years.
• According to Goldman Sachs, the country will become the ninth largest
economy in the world and the third largest in Europe by 2050
• Large and yet unsaturated market
• Half of the Population is under the age of 29
• Developed infrastructure and logistics
• Centrally located
• Energy Corridor and Terminal of Europe
• Large and strong domestic market
• Mature and Dynamic Private Sector
• Liberal and reformist investment Climate
• Customs Union with the EU since 1996
Opportunities For Mauritian
Businessmen
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Agriculture
Textile, specifically denim fabrics
Food and Beverage
Tourism
Consumer Goods
Key Projects & Trade Shows
Key Projects:
• Istanbul Finance Project
• 3rd Bridge on the Bosphorus
• 3rd Airport in Istanbul, planned to be the biggest in Europe
• Privatization of power plants
• Bioistanbul
Key Trade Shows:
• Foodİst
• World Food
• Istanbul Fashion Week
• Texbridge
Business Culture I
• Shaking hands, both male and female is normal in Turkey.
• A personal relationship is an important basis for a successful business
affiliation in Turkey.
• Proceedings begin slowly with the exchange of pleasantries and the
drinking of Turkish tea served in small glasses
• Pricing and finance are tackled slowly and never at the beginning of
negotiations
• Entertaining in the evenings can greatly assist the development of a close
relationship.
Business Culture II
• Turkish people are highly hospitable and business is relationship-based,
so it is good to take time to get to know the counterpart.
• When entering a room, it is common to greet the most elderly or most
senior first with a handshake.
• In general, Turkish people will identify themselves as Muslim but will not
necessarily practice. Some will drink alcohol but eating pork is extremely
unusual.
• Status is important – family background, profession and appearance
• Gadgets like a state-of-the-art mobile phone are popular.
• Bargaining is part of everyday life and will occur at all levels
Key Centers for Business
Main Cities in Turkey
Population (mn)
Main Industries
Istanbul Region
15
finance, retail, construction,
tourism, automotive, industry, machinery
Ankara
5
energy, machinery, industry, defense,
Ministries
Izmir
4
agrifood, international logistics,
tourism, energy, F&B, industry
Bursa
2,9
textile, automotive, machinery
Antalya
2,1
tourism, agriculture, marina, forticulture
Gaziantep
1,8
machinery, textile, agriculture
Travel to Turkey
• Currently, no direct flight with Turkish Airlines, but it is under discussion
and expected that a direct link Istanbul – Mauritius will start in the near
future.
• Internal flights to main cities like Ankara, Izmir, Antalya are very common
• Trafic is a problem. It is not advised to drive for people visiting Istanbul for
the first time.
• Moving by taxi or hiring a driver/ rent-a-car is a better option
• Maximum 3-4 meetings per day. A typical first meeting takes 1 – 1,5 hours.
Focus on
Turkey - Mauritius
Relations
Main Business Sectors &
Trade Figures
Main Matching Business Sectors between the two
countries are: Agriculture, Textile, F&B, Tourism, Logistics.
Mutual trade volume between Turkey and Mauritius
Trade volume between Turkey and Mauritius was 41.7 million US$ in 2012.
Exports to Mauritius were equal to 35.5 million US$, whereas imports from
Mauritius were valued at 6.2 million US$.
The principal exports of Turkey to Mauritius: iron and steel bars, leather
articles, machinery products as well as rubber tyre
The principal exports of Mauritius to Turkey: denim fabrics, T-shirt and plain
weave cotton, bakers wares.
Consular Information
Ordinary passport holders from Mauritius are required to have visa
to enter Turkey. They can obtain one month multiple entry visas at
the Turkish border gates. Three month period multi entry visa can be
obtained from Turkish diplomatic representations abroad.
The Turkish Embassy
Physical Address : 1067 Church Street, Hatfield,Pretoria, South Africa
Postal Address : PO Box 56014, Arcadia, 0007,Pretoria, South Africa
Tel : +2712 342 6055/6
Fax : +2712 342 6052
E-mail : pretbe@global.co.za
Web : www.turkishembassy.co.za
Survey Main Findings
PRODUCT CATEGORIES
Food & Beverages I
Highlights:
•
F&B industry grew by 18.1% in 2012
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Share of F&B industry within GDP is 20,1%
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The total value of F&B exports was announced as $6,708 million in 2012.
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The value of F&B imports was reported $3,429 million in USD.
•
Top 5 import countries for the F&B industry in Turkey are Malaysia, United States,
Germany, Ukraine, Netherlands.
•
«Vegetable and Animal Oils & Fats Sector» has the highest share of imports equal to 32,5
%, while «Pasta, Noodles, Couscous and Bakery Products» has the lowest share of
imports.
Food & Beverages I
Banana chips
• Turkish is a big consumer of Banana
• Only one supplier of Banana chips from Ecuador:
– Plantain Chips available in packets of 75g.
– Flavours available are:Jungle Chilli. Garlic and Pacific Sea Salt.
• Retail prices in supermarkets is around Rs 54 for the 75g packet
• Quality and price of Mauritian Banana Chips found to be very good.
• Mauritians can compete with “Plantain” by adapting its production to suit
the local tastes.
• The Banana chips will need to be marketed as a healthy snack so as to
gain market acceptance (less monosodium level).
Food & Beverages II
Tuna
• 9 tons of tuna fish imported in Turkey p.a
• Kerevitas and Dardanel are the two main players
• Albacore, Bigeye, Northern Bluefin, Skipjack and Yellowfin Tuna are the
main types.
• Imports from Philippines, Thailand, China
• Good potential for Mauritian exporters if there is good price/quality
value
Food & Beverages III
Pineapple, Litchis and
Breadfruit
• Bananas, pineapples, coconuts,
avocado, kiwi are the main imported
tropical fruits
• Logistics and Customs issues
• 100,000 tons p.a bananas are
imported from Ecuador, Costa Rica,
USA.
• High potential for fresh Victoria
Pineapple during off-season.
• High Potential to enter the market for
fresh Litchis and Breadfruit
• High Potential for canned pineapple
and canned litchis.
• Breadfruit not well-known but
importers willing to test the market.
Food & Beverages IV
Alchoholic Beverages
• The top four alcoholic beverages produced and
consumed are beer, raki, wine and vodka.
• Local players continued to dominate alcoholic drinks sales in Turkey during
2011.
• Rum is not much preferred alcoholic drink by local consumers, but there is
certain niche market in the hotel industry, specifically at 5 * all inclusive
hotels.
• Fruits in the rum bottle are not allowed to be imported according to
Turkish standards.
Food & Beverages V
Cut Flowers
• rose, pink, orchid are the
main imported cut flowers
• Turkey is also cut flower
producing and exporting
center
• Turkey imports cut flowers
mainly from Netherlands,
Kenya.
Spices
• black pepper, chili pepper, mint,
thyme, cumin and cinnamon are
mostly consumed
• Exotic spices are not much of
demand
• Distribution channel obstacle,
due to high shelf costs at
supermarkets
• The value of spice import in
Turkey is relatively insiginificant
(250.000 TL)
Food & Beverages VI
Noodles
• Turkey is one of the top pasta producers in the world
• Joint venture with Japanese Nissin Food & Yildiz Holding for noodle
production in Turkey
• 1,000 tons noodles imported
• Growing young population, economic prosperity and increasing urbanization,
it is expected that the consumption of noodle will increase in the future.
• Mauritian noodles can compete with “Indomie” price-wise.
Food & Beverages VIII
Halal Certification
• Association for the Inspection and Certification of Food and Supplies
(GIMDES)
• 20% of consumers pay attention to Halal certification
• GIMDES has a representative in South Africa
• Mauritian exporters are recommended to initially target the 80%
consumers who do not look for Halal certification.
Textile & Apparel I
• Textile and clothing are among the most important sectors of the Turkish
economy and foreign trade.
• These sectors had a 18,5% share in total export volume
• There are more than 40,000 textile and clothing companies in Turkey
with an estimated workforce of 750,000 employees
• Turkey ranks 8th in world cotton production and 4th in world cotton
consumption.
• The Turkish clothing industry is the 6th largest supplier in the world.
Textile & Apparel II
• Significant Increase of textile imports since 2003
• Top 10 import countries are China, Bangladesh, India, Italy, Vietnam, Sri
Lanka, Egypt, Pakistan, Spain, Indonesia
• The local apparel industry is very competitive in both price and quality.
Turkey is a manufacturer of T-shirts, coats, jackets, swimwear, kidswear
and lingerie for world famous brands.
• Turkey is importing ready-to-wear, but mainly premium brands from Italy
and USA or average quality offers with very attractive pricing from the Far
East.
Price Positioning of Denim Fabrics
Product Description
520942
Unit FOB
value (USD/
Ton)
Competitors
Average
Denim, with >=85%
Pakistan
cotton, >=200g/m2
Denim fabrics of India
cotton, <85% mixed Italy
with m-m fib, more
than 200 g/m2
Mauritius
Comments
 Mauritian
denim
is
competitive compared to
6,864
the costs of products
coming from Pakistan, and
7,900
India and seems to be of
14,171
comparable quality. Denim
from Italy seems to be of
high quality.
7,659
6,927
Price Positioning of Denim Fabrics
Product Description
521142 - Denim fabrics
of cotton, <85% mixed
with m-m fib, more than
200 g/m2
Comments
Unit FOB
value
(USD/
Ton)
Competitors
Average
6,660 
Pakistan
China
6,401
6,804
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Mauritius
6,769
Mauritian product is positioned
among the cheapest compared
to the top 3 competitors for
this product.
There is great potential to
further penetrate the Turkish
market
and
Mauritian
exporters should ensure that
quality is better than Pakistan.
Denim Garments & Textile
• There are couple of well-known local denim fabric manufacturers like Isko,
Deba, Bossa but still Turkey imports quite a big volume of denim fabrics
and denim garments.
• The value of denim fabric imports was around to 431 million USD, while
the value of denim garment imports was around to 184,4 million USD in
2011.
• The top 5 countries that Turkey imports denim fabric are Pakistan, India,
Italy, China and Bahrain.
• In recent years, the highest increase of denim fabric import to the Turkish
market was from Romania and Morocco.
• Mauritius on the other hand is number 14 in the list of denim fabric
importers to Turkey in 2011.
Denim Garments & Textile
Value of denim fabric imported from Mauritius was:
• 3.151.808 USD in 2009
• 3.243.443 USD in 2010
• 3.462.090 USD in 2011
• The share of Mauritian imports in the total value of Turkish denim fabric
imports is only 0.8 %
• There is definitely potential for further penetrating the Turkish market.
• For example, the share of denim fabric imports from Pakistan in the
Turkish denim industry is 45 %; from India it is 10,2 % and from Italy it is
9,5 %.
Textile and Garments
Opportunities for Mauritius
• Customs duties will be phased down over 4 years
• Customs duties still imposed on India, China, Pakistan
• Since there is cut-throat competition for cotton denim, Mauritians should focus
on soft denim garments (mixed with viscose and polyester).
• Turkish importers not happy with the Quality and Standards from Asian Exporters
– opportunities for Mauritian exporters
• Even if Asian operators are competitive, there are many hidden costs since the
Turkish clients have to travel regularly to check quality
• Key Success Factors: Reliability, Quality, Trust and Long-term relationship
Ship Models
• It is relatively small and niche market, but still with
potential for growth
• To be able to work with shipyards, the Mauritian
exporter should be ready to work on order basis
• Price and quality level of Mauritian models very
good
• The Ship Model Association in Istanbul ready to
support Mauritian entrepreneurs.
Sunglasses
• The annual consumption of frames is 9-10 million pieces
• The annual consumption of glasses is 20-25 million pieces
• The main import markets for spectacles and sunglasses
are China, Italy, France, Germany, Japan and South Korea
• It is an import driven market, but imports which are
mainly from China are supplied at very competitive prices
• Mauritian operators need to compete on quality and price
aggressively from China.
Footwear & leather
• The footwear market is quite price sensitive in Turkey
• High Quality local production available
• The footwear offer should be of high leather quality and offered at a
competitive price.
Key Success Factors
• Advanced Research and Planning
• Adjustment of Business Model to Suit local conditions
• Establishing efficient logistics
• Long – term commitment
• Relationship development with distributors, local government and partners
• Understanding competition and market dynamics
• Prior international experience would be an advantage
• Patience when dealing with government and empathy for a different culture
• Be adjusted for realistic time frames and budgets
Realities of the Turkish Market
• Language is a vehicle for better business relationship
• Relations with buyers are very important; thus the importance of customer
loyalty
• Although it depends on sectors and industries, it is a fact that Turkish buyers
prefer to deal with local agents. (specifically in Textile business)
• The presence of the Mauritian company in the local market should be
continuous and long-term. Interrupted and unstable presence is a reason for
disappointment and failure
Market Entry Strategy I
There is need for promotional effort,
which will create visibility of
Mauritius in the Turkish market and
furthermore position it as a brand
Market Entry Strategy II
• Inward Buying Mission in August 2013 - MAITEX
• To participate in certain fairs, specifically textile and food
• To organise Trade Promotions Events in Turkey : Contact Promotion
Programme and Buyers / Sellers meetings in collaboration with the local
Chambers (i.e Istanbul Chamber of Commerce) and thus provide a platform
for Mauritian and Turkish Businessmen to meet.
• To organise a Trade Mission to Turkey
Market Entry Strategy III
• Collaborate fully with key Institutions:
• The Turkish Chambers of Commerce.
• Istanbul Chambers have 350,000 members who can easily be reached
through its newsletter.
• Build strong ties with TUGIDER, the association of Food Importers.
• TUSCON businessmen Association
• The quality of the offers should be one that fits European market.
• To enter and successfully compete in the Turkish market value / price ratio
compatible with the right quality is critical for success for any product
category. Low quality products don’t have much chance in the market.
• Mauritian exporters should mainly target middle and upper segments of the
market
Who We Are &
How We Can Assist You
Expatia Consulting is collaborating with
Enterprise Mauritius
to support Mauritian exporters looking for market
opportunities in Turkey
EXPATIA Turkey
• Our office is based in Istanbul
• More than 10 years experience in the consulting field:
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Market entry services
Matchmaking & Partner identification
Market research
Trade mission support
Investment promotion services
• Our Clients are Enterprise Ireland, Enterprise Mauritius, Invest
Northern Ireland, Austria Business Agency, Torino Chamber of
Commerce, Confindustria Bergamo and many other consulting
companies from all around the world.
EXPATIA Turkey
Ms. Nese Secer
Managing Director
EXPATIA Investment Consulting
Nef 163, Talatpaşa Cad 163
Kat 5, D:244, Kağıthane / Istanbul / Turkey
www.expatia.net
nese@expatia.net
Wishing you
success in
the Turkish
market
Thank You
Q&A