In the past, large stores threatened my grandfather’s business. Today, Markafoni has overtaken YKM.

It appears that the online shopping company Markafoni is worth more than Yeni Karamürsel, one of Turkey’s most prominent and rooted chain stores. It was rumored in July 2011 that one of the group companies of the global online shopping giant Naspers paid $200 million for a 70 percent share of Markafoni. We don’t know the value precisely as the transaction was private. Markafoni was one of the first online shopping clubs in Turkey. At $200 million for 70 percent of its shares, the total value would have been 320 million TL based on the exchange rate back then. Recently, the Boyner Group declared that 63 percent of the shares of Yeni Karamürsel had been sold for 190 million TL. Then, the present value of Yeni Karamürsel is around 300 million TL. Markafoni was founded in 2008, while Yeni Karamürsel Mağazası (YKM) dates back to 1950. Markafoni is accessible online in  81 cities in Turkey. YKM has stores in 35 cities. Markafoni is valued at 320 million TL; YKM 300 million TL. So, how did Markafoni surpass YKM?

My grandfather was a merchant tailor in Bursa.  I have a vague memory of his shop at one of the busy spots on the main street. Now there is a huge shopping passage there, but I still see my grandfather’s shop whenever I pass by. He sold fabric and sewed clothing. At the beginning of the twentieth century, merchant tailors played an important role in the distribution channels of the textile sector. Within the value chain of the sector, you have to provide the consumer with fabric whether you are a producer or an importer. Let’s call this the fabric distribution channel. My grandfather carried out that task. I don’t remember if there were any YKM stores in Bursa when my grandfather decided to close down his shop. But I remember there was one when I was a kid. There were YKM stores all across Turkey. They sold all sorts of goods as well as ready-made clothes. Merchant tailors started to lose their importance. They left the scene, just like cotton fluffers did. In the next phase, shopping malls entered our lives. Finally, Markafoni and other e-commerce companies appeared simultaneously throughout the country. Now people are able to shop while they are sitting in their homes or at their office desks. It is the time of online shopping. In the past, large stores threatened my grandfather’s business. Today, Markafoni has overtaken YKM. Currently, e-commerce has just a 2.5 percent share in total retail. There is a long way to go. The potential is worth noting. Why? Because of the logistics and institutional infrastructure of Turkey. Let me leave that to another time.

The world has been changing quite rapidly. The change is coming to you on its own. There is an advertorial being shown on TV channels in Turkey lately, encouraging people to shop at local stores. I think this is the side effect of what has been going on. Some things change, some people are affected. Local stores are closing down as the distribution channels have been changing and bypassing them. The old is replaced by the new. Technological change has been changing the distribution channels within the country. The game used to be small shops against supermarkets. Now it is more like small shops against the windmills. What else can I say about the Internet? There isn’t even a tangible channel to talk about. I believe that a healthy urbanization process is the only way to ensure the survival of local artisans and small shop owners. When your kids say they are hungry when you are on the road, you instantly head to the nearest shopping mall to avoid the parking problem, right? At least I do.

This commentary was published in Radikal daily on 12.03.2013