Alibaba is to boost its e-commerce business outside China with a $2 billion investment in its Turkish unit Trendyol, Reuters reported, quoting a statement from Trendyol on Monday.
Why it matters: Alibaba’s decision to increase investment in Trendyol comes after the Turkish platform made an operating profit for the first time in the second quarter. The tech giant’s expansion into the Middle Eastern country, one that often serves as a bridge between Europe and Asia, will bolster its global business efforts.
Details: The financial commitment was made during a meeting between Michael Evans, president of Alibaba, and Turkish President Tayyip Erdogan. While details were not disclosed, the investment is expected to materialize “in the near future,” said Evans.
Trendyol said in the announcement that the Chinese e-commerce giant intends to establish a data and logistics center in Ankara, the capital of Turkey, and an export operations center at Istanbul airport.
Alibaba acquired major shares in Trendyol via a $728 million deal in 2018, and has invested a total of $1.4 billion in Turkey to date, according to Evans. Over the past five years, Trendyol, as the country’s largest e-commerce marketplace, saw its customers rise nearly threefold to 30 million. The platform boasts around 250,000 sellers, offering over 200 million items.
Beyond its business focus on Turkey’s domestic market, the online marketplace made efforts to expand into Azerbaijan in May, a year after Trendyol’s entry into Germany. The platform is also gearing up for launches in the Netherlands, Luxembourg, and the UK soon, according to a report by Turkish media outlet Daily Sabah.
Context: In 2022, the size of the Turkish e-commerce market grew 110%, rising from 382 billion Lira in 2021 to 801 billion Lira last year, according to research conducted by the Turkish E-Commerce Association (ETİD). E-commerce accounted for a 16.5% share of the retail sector in 2022, in contrast to China’s more than 31%.