The coronavirus outbreak is forcing many sectors toward technological transformation. While the lockdowns and restrictions due to the pandemic have led to an increase in e-commerce turnover, hard times await the institutions that do not adapt to the transformation.

The online holiday and travel industry, which grew by 30% last year, is expected to experience an unprecedented contraction in 2020. The necessity of staying at home during the quarantine period led to growth in online sales, while the contactless payment option was also instrumental in the growth of e-commerce.

The sector continued to grow in Turkey in 2019 as its market size hit TL 83.1 billion ($11.82 billion), a 39% year-on-year, according to the findings of this week's "Turkey's e-Commerce 2019 Market Size" report, jointly prepared by Turkey's Informatics Industry Association (TÜBİSAD), Deloitte Turkey, SimilarWeb and Inveon.

While the sector grew 18% in dollar terms, the average annual growth rate of the sector stood at 35% between 2015 and 2019.

Keep up with the transformation

"As we all follow closely, the process of transformation into the digital economy has gained tremendous speed with the COVID-19 outbreak. While managing this novel crisis, the whole world first used technological tools for the sustainability of its political, social and economic activities," TÜBİSAD Chairman Kübra Erman Karaca said in her keynote speech during the online press conference.

Karaca noted that for the sectors and companies that can keep up with this technology revolution, the performance displayed in today's conditions is not surprising.

"We can evaluate the achievement of a volume of TL 83.1 billion with a 39% growth in 2019 as a positive development. In this extraordinary period we have experienced, we have witnessed the rapid delivery to the consumer and the new categories that have grown very rapidly, and the segment that has never used e-commerce has become a user. With the increasing use of mobile phones and the share of mobile internet and mobile applications in e-commerce, we hope to announce better growth figures for 2020."

E-commerce is not an alternative

The e-commerce sector reached a 6.2% share within the retail sector with strong growth, Hakan Göl, partner of Deloitte Turkey, said. "But we think that this rate is low compared to the potential of our country."

"The COVID-19 outbreak also showed that e-commerce is no longer an alternative channel. The sector size has exceeded TL 80 billion and we expect growth to continue stronger. We believe that companies that focus on digital transformation and e-commerce will be prominent not only in our country but also in global markets in the coming years," Göl added.

Fastest growth in online retail

Online retail, which is expected to grow at the fastest rate this year, has managed to be the area with the highest growth with 48%, reaching TL 30.8 billion. The marketplaces were quite instrumental in this regard with a 50% growth, achieving TL 29.3 billion in volume.

In the multichannel online retail category, the highest growth rate was seen in clothing and shoes with 40% and TL 3.5 billion in market size. Home and decoration stood at TL 1.7 billion with an increase of 33%. Electronics, on the other hand, amounted to TL 4 billion with an 18% growth. In the online holiday and travel category, which is expected to be the most affected by the epidemic, only online holidays and travel achieved a growth of 47%, with TL 4.3 billion. Multichannel holiday and travel grew faster by reaching TL 25.9 billion.

The share of mobile applications booms

With the increasing use of mobile phones for online purchases, the share of mobile commerce in e-commerce has increased significantly over the years. This year, e-commerce data on mobile internet and mobile applications were added to the report.

The share of mobile in e-commerce turnovers has reached up to 60%. As the users' mobile experiences increase and the companies continue to invest in these areas, the 60% turnover share is expected to increase in the 5% to 10% range annually. According to the report, the share of online retail, which was measured as 5.3% in Turkey in 2018, rose to 6.2% in 2019. For developing countries, including Poland, India, Brazil and Russia, the average share of online retail in total retail was 6.7%, while the average rate of developed countries stood at 12.3%.

Meanwhile, top 10 rated products following the COVID-19 outbreak include single-use gloves, bread baking machine, coffee makers and grinders, health and care devices, packed ready foods, home sports equipment, diapers and care products, toilet paper, paper towels, vitamins, supplements and dental care products

According to Deloitte, the effects of the global COVID-19 outbreak have had a range of impacts on different categories in Turkey amid a period of at-home education and work. Baby and children's products, internet, TV, pet supplies, underwear products, discount markets, online gaming, headphones, speakers, books and social media come to the fore as the categories positively affected by the COVID-19 outbreak, while the top categories adversely affected are hotels, travel, transportation, airlines, car rentals, jewelry, sports media, sportsbook, culture and cinema, real estate, automobile sales and home services.

Increase in share of mobile applications

Applications we use on smartphones help entrepreneurs observe changes in consumer behavior. Mobile app tracking company Adjust's new research shows that the mobile app sector grew during the COVID-19 outbreak.

While the COVID-19 outbreak has negatively affected the overall economy worldwide, the mobile application economy has been positively affected in this period. Global SaaS's Adjust's annual Global Mobile Application Trends report puts forward trends in the light of 2019 data.

The report sheds light on paid and free apps. According to the outcome, marketers make in-app activities paid, and the world of mobile apps evolves into a "pay and play" form. The report compares the figures for the first quarter of 2019 to the first quarter of 2020, examining how the COVID-19 outbreak affected the mobile application sector financially.

Online food services surge

According to the data in the research, there has been a significant increase in user use of applications covering many sectors and the number of downloads in new applications in 2020. This increase has been observed especially in the business, food, beverages and game sectors.

Due to the epidemic, there has been a huge surge in the use of business applications, 105% compared to the first quarter of 2019, and new application downloads, with 70%, due to the increase in the number of people working from home. To make it easier to work from home, users prefer paid versions of applications, so in-app movements that have contributed to turnover have also increased by 75%.

Due to the lockdown, many restaurants moved to home delivery only, so the usage of food and beverage applications increased by 73% compared to last year. This growth rate is 21% for those who have just downloaded and started using the applications.

Online gaming increases

During this period, there was a big increase in gaming applications. People stuck at home during self-isolation have started gaming as well. Application downloads in this sector in the last week of March surged by 132% compared to last year. In general, in gaming applications, compared to the first quarter of 2019, saw an increase of 47% in application entries and 75% in new application downloads.

"There is very little data in the report beyond the app download and app input increase, indicating a fundamental change in user behavior after app download," Paul H. Müller, Adjust CTO and co-founder, said. "Users are still doing the same thing in the app. The average daily number of entries to the application is slightly above two, and exits from the application are at the expected stages."

Online shopping peaks at noon

The report reveals the differences between downloaded paid and free apps, indicating that marketers continue to monetize in-app activities as competition increases. Applications downloaded from paid sources accounted for 30% of total app downloads in 2019, compared to 24% in 2018.

Besides, the report examines how users interact with the mobile application industry throughout the day and include information about peak hours of use and opportunity windows for reactivation campaigns.

The times when e-commerce applications are used the most are between 12 p.m. and 2 p.m. and between 7 p.m. and 10 p.m., which constitutes a quarter of their daily total usage. Similarly, the use of food and beverage applications peaks between 5 p.m. and 8 p.m., and this period constitutes 31% of daily use.

Investment in shortest path from design to application

Startups and institutions trying to attract the customer staying at home during the epidemic through mobile applications have started to draw a new road map.

Monday Hero, a platform enabling the automatic conversion of sketch designs to iOS and Android native code that accelerates the mobile application process, has received an investment of TL 9.3 million from Can Aksoy.

By submitting a few definitions of the designs uploaded to the Monday Hero platform, software developers can transfer their user interface codes to their projects and complete their software development. At a time when speed is key, startups and institutions that want to enter the market get the tools to speed up the process. It saves you from writing native code.

TL 9.3 million valuation

Among the seventh term graduates of PİLOT, the startup acceleration program of Turkey's leading information and communication technologies company Türk Telekom, Monday Hero develops solutions for mobile application developers and software companies.

Monday Hero offers a software development platform that automatically translates designs prepared for mobile applications into code and shortens the software development process. Founded in 2019 by Burcu Geneci and Nazlı Temurtaş, Monday Hero managed to acquire an investment agreement at the seed stage on a valuation of TL 9.3 million from Can Aksoy.

TL 150,000 in cash support for PİLOT startups

The eighth-period applications have begun in PİLOT. In this scope, TL 150,000 in direct cash support will be provided to each team accepted to the program.

Türk Telekom Strategy Planning and Digital Deputy General Manager Barış Karakullukçu stated that 65 startups have graduated from PİLOT to date and have received a total of TL 4 million in cash support from Türk Telekom, while graduates provided employment for 350 people in 2019 and achieved a turnover of TL 41 million.

"To strengthen the entrepreneurial ecosystem in our country and to offer innovative products and services to our customers, we continue to increase our investments and works in this field every year," Karakullukçu said. "As part of the PİLOT program, which we launched in 2013 and started to accept the eighth term applications in February, we will continue to support startups with our technology, knowledge and connections. As Türk Telekom, we offer technology and infrastructure support to startups to take innovative business ideas that flourish in our country further and back them financially. In this context, I invite all entrepreneurs with innovative business ideas to apply and wish them all success."