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Free Shipping, Easy Returns, Exclusive Offers, Flexible Payment Options, Over 50,000 Apparel – “30 Million Customers Really Love Us”. With these words, Turkish e-commerce company Trendyol distinguishes itself on its German website. Founded in 2010, Trendyol is Turkey’s largest e-commerce platform and the first decimal place, according to Business Insider. Additionally, according to similar analysis firm Web, it was the second fastest growing fashion platform in Germany in February. After Trendyol began supplying the German market in 2018, the company’s first overseas headquarters has been set up in Berlin since this spring. Who is Zalando’s new competitor and what exactly are Trendyol’s plans for Germany?
Worth $16.5 billion – Trendyol is Turkey’s first 20th century
Trendyol was founded in Istanbul by Demet Mutlu, a Turkish woman born in 1981, as a digital clothing buying platform. The startup is now much more than that: In addition to its own brand and fashion from independent manufacturers, groceries are also sold via Trendyol Go, Trendyol Pay is its own digital wallet — and there are other offerings. This was not only well received by clients who seem to be mostly women from Europe, but also by investors from the USA. In mid-2021, Trendyol was valued at $16.5 billion in a funding round, becoming the first Turkish startup valued at more than $10 billion. The funding round was led by General Atlantic, SoftBank and Prineville Capital, among others.
Previously, the Chinese tech giant and Amazon competitor Alibaba bought a majority of Trendyol’s shares in 2018 and increased its stake to a total of 86.5% in the spring of 2021 with an investment of more than $300 million.
Trendyol still has to do some convincing with German customers
In Berlin, Trendyol wants to hire more than 200 employees by the end of the year, according to a Business Insider report, which was allowed to interview Germany’s Trendyol managers Caglacan Cetin and Shibu Tharakan. Cetin explains that Germany was chosen as the starting point for the company’s headquarters abroad because it is the largest fashion market in Europe – and “of course also because of the five million Turks who live here”. In addition to the office in Berlin, offices are also scheduled to open in Amsterdam and Luxembourg this year. “We are humble. We know we are the newcomers. To be competitive we have to do as good as or better than the existing competition.” Zalando & Co. owns. Already more customer data and loyalty, and it is important to compensate this customer. Perhaps winning the loyalty of German customers will not be so easy, despite the fact that the app has already been downloaded more than a million in just seven months: on the rating portal Trustpilot, 46 percent of reviews on Trendyol rated the startup as “unsatisfactory”. The reasons given are poor customer service, poor quality and wrong clothing sizes. Gettin seems aware of this: “So we [einen großen Kundenstamm ansprechen] “We have to invest a huge amount in marketing and good customer service,” he told Business Insider.
And in order to keep customers especially environmentally conscious, Trendyol still has a lot of work to do: on the one hand, the products of its own line are produced in Turkey under fair working conditions, which also reduces carbon dioxide emissions when transporting goods. On the other hand, according to Business Insider, 97 percent of the items available on Trendyol come from third-party retailers who don’t necessarily pay attention to fair working conditions or environmental protection. “But we’re just starting to question our operations and make them more sustainable,” says Setien. In Turkey, for example, some goods are delivered by e-scooter to improve the ecological footprint.
Trendyol can be profitable, but so far prefers to put money into expansion
Regardless of the main mission of customer loyalty, Trendyol wants to achieve sales of about 400 million euros in Germany in 2022 and raise the turnover to three billion euros by 2025, according to Cetin. According to Business Insider, business in Turkey is worth eight billion US dollars – in part due to the pandemic, during which the volume has grown by a total of 200 percent. Despite such large numbers, according to Trendyol Cetin, they are not profitable: “We could be profitable if we wanted to, but we would consciously prefer to reinvest profits in expansion.” By 2025, they want to invest another half a billion US dollars in establishing themselves in foreign markets. Cetin confirms existing rumors that in the next three to five years they want to take a big step and make it public. The fact that Trendyol is not yet profitable is not unusual – the situation is similar to the competition: Zalando’s turnover in 2021 amounted to about 14.3 billion euros, and the net profit of the company founded in 2008 was only 234.5 euros.
Trendyol is still quite new in Germany. It remains to be seen what Turkish Decakorn will do with its place in the German market and how it will convince German customers. So far it is not clear if Trendyol is barely staying afloat or whether Zalando & Co. It has become a threat as a strong competition.
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