As Turkey became relatively more expensive for many products, online shopping from abroad exploded. The shopping volume reached TRY 102 billion in 11 months.
Due to high costs and inflation in Turkey, shopping abroad has become more advantageous.
According to Interbank Card Center of Turkey (BKM) data, online shopping transactions made abroad with domestic cards in 11 months of 2023 increased by 138 percent compared to the same period of the previous year, from TRY 42 billion to TRY 102 billion. In the same period, the transactions within Turkey increased by 40 percent.
Increasing technological developments after the pandemic were also reflected in the way trade is conducted. While rising costs all over the world accelerated efficiency-oriented efforts, online shopping continued to grow with increasing momentum during this period. When the decrease in logistics costs was added to this development, not only growth was affected, but also the borders between countries disappeared in a sense. In fact, high costs and taxes in some countries have made it easier and less costly to procure from abroad.
Turkey stood out as one of these countries and online shopping from abroad exploded as Turkey remained expensive compared to abroad on Euro/dollar basis. According to the data of the BKM, the number of card payment transactions made online with domestic cards in the January-November period of 2023 increased by 36 percent and reached 232 million from 170 million.
Increase despite new regulations
These developments took place despite regulations in Turkey that make it difficult to trade online from abroad. In 2022, the customs duty on purchases made via the internet from outside the EU countries was increased from 20 percent to 30 percent, while the limit for shopping without declaration in this context was reduced from 1,500 Euros to 150 Euros, narrowing the scope. The tax rate of 18 percent on imports from the EU remained unchanged. Despite all these developments, the increase in online trade from abroad with domestic cards continued, and their 4.5 percent share in total in 2022 reached 5 percent as of November 2023. Looking at the details of the expenditures, service sector expenditures ranked first with TRY 42 billion, followed by travel agencies with TRY 16 billion and electronic goods shopping with TRY 5.2 billion.
“E-commerce is now a global game”
Electronic Commerce Operators Association (ETID) Vice President Emre Ekmekci, states that the both logistics and taxes are paid to Turkey for these products coming from abroad and in that sense Turkey has no loss. “Now logistics systems have accelerated a lot. This situation both increases our sales and makes online shopping from abroad attractive. I wish the balance was reversed here. As e-commerce companies, we are currently working on how to reverse this balance by using logistics advantage and how to sell Turkish products abroad. The rapid growth of the figures shows that e-commerce is a global game” Ekmekci said. The reason for this situation according to Ekmekci is the variety of the products abroad, some products being not available in Turkey, and despite the taxes and logistic costs, many products can still be cheaper abroad.
“We need to get ahead in this race”
Sinan Oncel, President of the United Brands Association (BMD), stated that this situation has become an important advantage for the consumer and said, “If you say let us sell abroad but let us not buy it, this time other countries will put limits on you. In line with the principle of reciprocity in trade, we need to be fast and get ahead in this race by offering attractive opportunities to both domestic and foreign customers by renewing both our e-commerce and logistics infrastructure. We need to open our brand diversity, which is important in terms of retail, abroad.”
Intermediary companies stepping in
Another trade association’s manager states that intermediary companies from abroad are stepping in and speaks as follows: “From Gulf, Azerbaijan, Europe and now Eastern Europe, intermediaries doing abroad transactions from Turkey. A cargo company says ‘do your shopping, send the product to my warehouse in Istanbul. I will bring that product for you. If you want, I can also shop for you.” The manager states also that Turkey is relatively more expensive right now, but private sector players can reverse this trend. For this, there should be no trade barriers for online trade, he underlines, “Because when we impose a tax, the other party also imposes a tax and the consumer suffers as a result.”
Foreign trade deficit expected in online by the end of the year
Statistics show that despite the exchange rate increasing by more than 50 percent last year, Turkey has lost its former attractiveness in both online and offline shopping. At the end of the year, it is expected that online spending made with domestic cards from abroad will exceed online spending made with foreign cards in Turkey and a foreign trade deficit is expected in this area. According to BKM data, while online shopping from abroad increased by 138 percent to TRY 102 billion, online spending from Turkey increased by 40 percent and reached TRY 105 billion as of November 2023.