30 pct of domestic e-commerce conducted illegally

The Association of E-Commerce Operators (ETİD) Chairman Emre Ekmekçi said Monday that 20 percent of e-commerce conducted from abroad is done illegally, saying this rate reaches 30 percent in Turkey when illegal social media is included, which makes up 10 percent of the overall rate.

"In the future, this statistic will reach as high as 40 percent. The Turkish state's tax loss is not less than TL 1 billion [$3.1 billion] per year in this case, while economic losses total around TL 3 billion," Ekmekçi added.

Ekmekçi said that e-commerce has grown very rapidly in Turkey, adding that nearly every sector is now in e-commerce and stating that there is no reason for any product that is subject to consumer demand in the retail sector to be excluded from e-commerce.

He pointed out that online shopping has saved a significant amount of time and increased the speedy efficiency among consumers, adding that Turkey has a high population of young people and this populace comes from a different cultural background in terms of consumption habits.

"We expect to see a growth rate of between 30 and 35 percent in e-commerce in 2017 - but that is not enough. The retail rate of e-commerce in the world is 30 percent whereas, in our case, it is around 2-3 percent. If traditional retailers and brands start seeing e-commerce as an opportunity rather than a threat, we may move forward," Ekmekçi said, going on to note that "There are brands in Turkey today that say, ‘Do not sell my brand online.' The brands need to be found in as many channels as possible and in the right way."

Emre Ekmekçi said that in 10 years, there will be a huge difference between those who own e-commerce and those who do not, in terms of the success rates of products and brand ranking in Turkey, adding that growth rates do not come from retail stores but rather online sales which contribute positively to the growth if the channel is used correctly.

Highlighting that Turkish consumers have learned to utilize the concept of online shopping and love it, Ekmekçi said, "We are not falling behind the rest of the world in this area. Online shopping has exceeded 50 percent of total sales in the sector and that rate continues to increase. The sector has serious potential for growth."

ETİD Chairman Ekmekçi pointed out that one of the biggest problems in the sector is social media sales, stressing that sales made by individuals on an individual-to-individual basis via social media outlets carries risks regarding consumers.

Noting that social media sales and person-to-person sales have been increasing, Ekmekçi said the former are growing more than legal e-commerce, stressing that precautions need to be taken in this respect.

Ekmekçi also pointed out that the second biggest problem facing Turkey's e-commerce sector is in sales made from overseas or abroad, adding that in such cases the consumer cannot exercise his right to return or exchange purchases made if a problem arises.

Referring to the sales policy of companies selling products to Turkey from another country, Ekmekçi said that online giants such as Alibaba.com and AliExpress send products from China directly by mail and, if you buy something for 30 euros, the invoice you receive upon delivery does not show 30 euros because the corporation indicates that the product is a "gift" to comply with Turkish customs laws.

"There is a very serious economic loss here," Ekmekçi said.

"The same goes for Booking.com. Many tourism agencies in Turkey are subject to stipulations according to the Association of Turkish Travel Agencies (TÜRSAB). However, this is not the case with Booking.com. In the case that you have selected a hotel from Booking.com and the place was inaccurately represented on the website, how do you complain, and to whom?" Ekmekçi asked, stressing that they do not oppose foreign companies doing business in Turkey while saying they should open offices in Turkey and do business here, rather than engaging in piracy. "AliExpress is one of Turkey's biggest pirate e-commerce sites, and we can easily use the word ‘pirate' in this case," he added.

Ekmekçi said that 30 percent of the e-commerce sector in Turkey is expected to come from cross-border pirated forms of commerce in 2020. According to Ekmekçi, there is a loss of 30 percent and the impact of this loss on the current account deficit is estimated at TL 8 billion. Currently, 20 percent of e-commerce conducted from abroad is done illegally. If another 10 percent is included from illegal social media, 30 percent of e-commerce in Turkey is also conducted illegally. In the future, this number could reach 40 percent. The tax loss to the Turkish state is not less than TL 1 billion per year in this case and the economic loss is about TL 3 billion.