Abstract
The rise of digital platforms is growingly acknowledged as a pivotal characteristic of contemporary capitalism. A subset of the literature on digital platforms scrutinized the political economy of platform companies, their data-driven business models along with the economic, social, and political consequences of platformization. Yet, this strand has been overwhelmingly interested in Big Tech companies in the United States and China. In this article, I aim to expand the geographical span of this emerging literature by scrutinizing platformization dynamics in Turkey, a middle-income country that has not been systematically examined so far along these lines. To this end, I present an assessment on the overall platform landscape in Turkey by focusing on three highlight digital platforms (Trendyol, Hepsiburada, and Getir). My analysis on the trajectory of these three platforms indicates the following. First, these platforms have exhibited meteoric growth rates and have risen among the most valuable companies in Turkey in a tremendously short period of time. Second, their aggressive growth strategies based on data extraction and network externalities have led to a strong monopolization drive. Third, they have rapidly expanded into adjacent business areas, transforming themselves into infrastructural components of the domestic economy, with profound impacts on production, trade, and labor relations. Fourth, they remain dependent on the infrastructure laid by Big Techs. These findings suggest that platformization is rapidly transforming economic landscapes other than the United States and China as well, yet in an uneven and dependent form, underlining the need to broaden the geographical focus of the concerned literature.
Introduction
The remarkable rise of the digital economy is increasingly recognized as a key feature of contemporary capitalism. It is indeed impossible to ignore the encompassing dominance over the global economy by digital platforms. The last two decades witnessed the astonishing metamorphosis of a handful of Silicon Valley startups into digital empires that hold enormous power over flows of information, goods, and services across the globe. Translating their core asset, namely big data, into extremely profitable business models, these platforms have rapidly climbed up to the apex of the global economy (Birch et al., 2021). Their meteoric growth in scale is accompanied by a similar expansion in scope as well. Going well beyond merely being an emerging industry in itself, they now constitute “the infrastructural core” of the world economy in an era of full-speed digital transformation (Van Dijck et al., 2018: 12), with far-reaching consequences for society. From production and commerce to socialization and political mobilization, from governance and finance to urban development and labor relations, it is hard to imagine a domain that has not been subject to the multifaceted implications of digital platforms (Beraldo and Milan, 2019; Dazzi, 2019; Hendrikse et al., 2021; Kitchin, 2014; Zuboff, 2019). These fundamental transformations have led scholars to coin terms such as platform capitalism, to describe the pivotal characteristics of our times (Kenney and Zysman, 2016; Langley and Leyshon, 2017; Srnicek, 2017; Steinberg, 2021). The emerging literature on platformization and platform capitalism has become a flourishing research field attracting attention from a wide range of disciplines including political economy, science and technology studies along with media and communication studies.
A crucial subset of this emerging field has focused on the novel accumulation dynamics that emerge along with the ongoing digital transformation of the world economy. Scholarly works that analyze the political economy of digital platforms now constitute a crucial research agenda in the field of the political economy of contemporary capitalism (Birch et al., 2021; Hendrikse et al., 2021; Klinge et al., 2022; Rikap and Lundvall, 2020; Sadowski, 2019). In this vein, the emerging literature has brought forward a number of issues such as the specific business models of digital platforms, the role of big data and artificial intelligence practices in their growth strategies, their relations with financial institutions, their policies to evade tax and escape regulation along with competition and monopolization dynamics in platform markets.
The fact that the top five rankings of the S&P 500 index got occupied by five digital platforms (Google, Apple, Facebook, Amazon, Microsoft, commonly abbreviated as GAFAM) as of 2019 is the most emblematic indicator testifying their spectacular rise. Furthermore, their combined market capitalization makes about 25% of the whole list (Birch et al., 2021: 3). This is indeed a phenomenon with rare precedents not only in recent times, but in the history of capitalism in general (Kenney and Zysman, 2020). In this vein, the Big Tech boom is resembled to the “the gilded age” which was marked by a powerful monopolization drive led by a handful of “robber barons.” It is noteworthy that the corona pandemic only exacerbated these trends while the “Big Tech barons” of our times, like Jeff Bezos and Mark Zuckerberg, achieved record wealth gains in a situation of economic turmoil and distress (Hendrikse et al., 2021: 4). While GAFAM situates the center of gravity of platformization firmly in the US, China emerges as the second highlight geography with Baidu, Alibaba, and Tencent (often abbreviated as BAT) closely following the lead of GAFAM in terms of user base, revenue, and market capitalization (Davis and Xiao, 2021: 104; Jia and Winseck, 2018). Consequently, scholarly works have focused on these two geographies as the primary landscapes of platformization.
Given the sheer scale of the United States and Chinese companies, this focus is quite understandable. However, it leaves out important dynamics elsewhere. This is also partly true for the broader literature. There is a growing body of works that explore the impact of digital transformation and platformization
Starting from this observation, I aim to shed light on the impacts of digital transformation beyond the US and Chinese cases. My central question, in this respect, is whether the accumulation patterns affiliated with platformization pertain to other national contexts as well? Can we observe a rise of digital platforms with similar characteristics to American and Chinese platform giants? If yes, what are the commonalities and differences concerning the dynamics of this process? Who are the driving actors and how are they transforming the economic landscape? How can we construe their entanglements with American and Chinese Big Techs? What is the role of the state and the institutional setting? What are the consequences for competition/monopolization dynamics? Finally, what are the implications concerning the literature on the dynamics of platformization on a global scale?
In this paper, I seek to answer these questions by presenting evidence from Turkey, a middle-income country, to the best of my knowledge, which has not been the subject of a systematic inquiry along these lines. To this end, I specifically focus on three leading digital platform companies from Turkey—Trendyol, Hepsiburada, and Getir—all of which have exhibited exorbitant growth rates in recent years and joined the ranks of the most valuable companies in Turkey during the COVID-19 pandemic. My main argument can be summarized as follows. The trajectory of these three firms characterized by data-driven business models, aggressive growth dynamics, monopolization strategies, and infrastructural expansion demonstrate that platformization is rapidly transforming the Turkish corporate scene. Along with meteoric growth rates and deepening monopolization in domestic markets, however, Turkish platforms remain dependent on the infrastructure laid by Big Techs. Thus, platformization of the economy proceeds in places other than the United States and China as well, yet in an uneven and dependent form.
My findings are the outcomes of a document analysis that made use of a variety of sources including official statistics, industry reports, and media coverage. Financial account analysis is a crucial source in recent studies on digital platforms. Yet, in this respect, there are certain limitations for the Turkish case. Detailed data on the balance sheets of Trendyol and Getir are not available, since they are private firms. Hepsiburada's initial public offering in NASDAQ in July 2021, however, makes it possible to access financial accounts going back to 2018. Given these, I sought to put the available data into perspective with overall trends for the nonfinancial firms in the Turkish Stock Exchange. The data on the financial structure of the firms operating in the Turkish Stock Exchange was obtained through the Refinitiv Eikon database. Following Orhangazi (2019), I employed a data cleaning process to filter out financial firms using the SIC (standard industrial classification) code indicator and to obtain trends for several relevant indicators.
In the following, I first review the literature on the political economy of platformization and highlight the key issues within this strand, which I then scrutinize for the case of Turkey. This is followed by a profile analysis of the three companies. In the penultimate section, I discuss the regulatory and institutional dimensions of the platform landscape in Turkey before summarizing my findings in the conclusion along with the implications for the overall literature
Theoretical underpinnings: The political economic dynamics of platformization
The phenomenal ascent of digital platforms has recently begun to be recognized as a pivotal dynamic of contemporary capitalism and to attract growing scholarly attention. Explorations on the factors that led to this spectacular rise, on the other hand, are quite varied. Generally speaking, neoclassical economists tend to explain it by the rather autonomous dynamics of technological breakthroughs (Cole et al., 2021). Typically exhibiting an explicit fascination with the techno-libertarian ideology of the Silicon Valley entrepreneurs, these accounts argue that a series of innovations in internet technologies simply led to new products and new markets for these products. In the self-perception of these entrepreneurs, these innovations “aim to make the world a better place” by connecting users worldwide, (Fernandez et al., 2020: 6) “removing market frictions” and “reducing transaction costs” (Evans and Schmalensee, 2016). The transformation of what were once mere startups into platform magnates at the top of the world economy, the narrative goes, is solid proof of the dynamism of capitalist competition. This is often coupled with celebratory remarks for the political implications of platformization for encouraging labor participation and boosting democracy (Davis, 2016; Heeks, 2017).
A closer and critical look, however, suggests otherwise. In this vein, several scholars note the role of financial institutions for the rise of platform companies. Winseck (2011), for instance, demonstrates that the telecoms, internet, and media industries were the pivotal frontiers of the corporate financialization drive in the Atlantic world. Srnicek (2017) highlights the role of low-interest policies as a response to the financial crash in the Global North for accelerating platformization. Blakeley (2021), on the other hand, posits that crucial leaps of Big Tech have been rendered possible in a situation marked by the availability of cheap credit looking for profitable outlets, as in the aftermath of the dotcom crisis and at a larger scale that of the 2008 crisis. Similarly, Hendrikse et al. (2021: 4) note the extremely generous monetary climate of the post-2008 world, where “Big Tech companies became a safe haven for investors.” Thus, far from being a spontaneous development, the rise of digital platforms was strongly facilitated in an environment where investors considered platforms as “the next big thing” and poured massive amounts of liquidity into their business (Langley and Leyhson, 2017). Studies that analyze the balance sheets of platforms indicate that these firms are utilizing financial leverage at levels significantly higher than the median nonfinancial firm (Fernandez et al., 2020).
The business models of digital platforms constitute another major debate within the literature. It is true that there are significant differences in the products, services, and activities of digital platforms. While Apple mainly generates profits through electronics hardware production and Microsoft through software production, Google makes money through ads and by selling its vast data flows acquired by its search engine which it offers to the public for free. Amazon and Alibaba, on the other hand, are in principle online retailers making money out of commissions from customers and sellers. These differences notwithstanding the evolution of digital platforms share certain characteristics that allow us to come up with a stylized model.
In this regard, datafication emerges as one of the crucial features of digital platforms (Sadowski, 2019). In the age of platform capitalism, big data emerges as the prime resource to be utilized by platforms for training machine learning algorithms, improving predictive capacity; and thereby to be transformed into value through targeted advertising, customer profiling, and selling to third parties (Van Dijck et al., 2018; Beauvisage and Mellet, 2020). Thus, platforms operate with a “data imperative” (Fourcade and Healy, 2016: 14) “to collect as much data as possible, from as many sources, by any means possible” (Sadowski, 2019: 7). Contrary to the claims of neoclassical accounts, the dominance over endless flows of user data lends first comers enormous market advantage by amplifying “network effects” and “economies of scope,” consequently entrenching their market position to the detriment of new entrants (Santesteban and Longpre, 2020: 485). That is also why platforms are typically programmed to “get users hooked,” in order to maximize user engagement and therefore data collection (Hendrikse et al., 2021: 63). As a consequence of these traits, Big Techs typically pursue an aggressive growth strategy to achieve a “winner-take-all” market dominance as quickly as possible and once this is realized, to eliminate or absorb potential rivals through M&As (Klinge et al., 2022). An implication of this strategy is what is described as “the new patient capital” phenomenon (Rahman and Thelen, 2019). Unlike the short-termism of the financialized corporations in the 1990s, today's tech investors follow a distinct route in which the short term is sacrificed for prospective revenue streams that could be guaranteed when a certain level of market dominance is achieved (Hendrikse et al., 2021: 6).
This takes us to another related issue concerning the rise of digital platforms that is the dynamics of competition and monopolization. The current market structure of the platform economy exhibits clear monopolistic or oligopolistic trends. For instance, Google has an absolute dominance in the search engine scene with over 86% share as of 2021, while its navigation service Google Maps has a 79% share in the market. Amazon, on the other hand, controls more than 49% of the US e-commerce sales (Kenney and Zysman, 2020: 60). Google and Facebook's combined share in the digital ad markets in the United States amounts to no less than 97% (Orhangazi, 2019: 11).
A noteworthy implication of the drive is the issue of differentiation among digital platforms in terms of scale and scope. As Van Dijck et al. (2017: 12–22) observe, “the platform ecosystem” is far from being “a level playing field.” In their seminal study, the authors make a crucial distinction between “infrastructural platforms” and “sectoral platforms.” While the former includes only a handful of companies that constitute the heart of the digital economy, the latter refers to platforms that are specialized in a single sector such as transportation (Uber), hospitality (Airbnb) or education (Coursera) and operate on the infrastructure laid by the former group. Sectoral platforms are, thus, dependent on the infrastructural platforms which have turned into “obligatory passage points” (Bassens and Van Meeteren, 2015) in the ecosystem. In fact, the notion of Big Techs that emerged as a journalistic term and then made its way into scholarly writing refer to nothing but infrastructural platforms. As Hendrikse et al. (2021: 66) put it, “Big Tech is at the center of a new sociotechnical system, functioning as its core operating system, subjecting the rest of the world to its inclusive control drift and rent-seeking logics.” How this dynamic of differentiation among platforms plays out in contexts other than the United States and China is a crucial issue that I address in this paper.
The trajectory of a few digital platforms into Big Techs in a relatively short time is an interesting issue in itself. Their evolution has followed an ever-expanding trajectory through which they proliferated their business activities beyond their core area. In this regard, Amazon is the most emblematic case. Starting its journey as an online bookseller, the company transformed itself into a digital giant whose activities span a wide spectrum including e-retail, online grocery store (Amazon Grocery Store), cloud and web services (Amazon Web Services), electronics hardware producer (Kindle Tablet), social media services (acquisition of Twitch), TV and movie producer (Amazon Prime), payment systems, logistics, and fashion design, along with brick-and-mortar retail (Boyer, 2021: 10; Kenney and Zysman, 2020; Van Dijck et al., 2017: 169). A similar trend is at work for the other Big Techs as well. Besides its main area of search engine, Google has affiliates in smart home technologies, autonomous vehicle production, Internet of things, as well as web and cloud services.
The unchecked power of Big Techs has recently begun to cause concern in the public opinion and to catch the attention of regulators at national or supranational levels. A series of lawsuits in the United States, the EU, and elsewhere have sought to challenge digital giants on the grounds of a number of issues such as data privacy, taxation, and competition dynamics (Santesteban and Longpre, 2020). The US Congressional Investigation of Competition in Digital Markets in 2020 (US Senate Congressional House Committee on the Judiciary, 2020), for instance, warned that high concentration rates and tendencies for monopolization in the US platform markets were a threat to competition. Yet, more often than not, charges against digital giants hit a dead end due to a number of reasons. First, the current structure of competition laws that is mostly focused on “consumer welfare” (the absence or existence of unfair price hikes stemming from monopolization) is incompatible for dealing with platforms that typically provide services to customers free of charge (Blakeley, 2021; Birch et al., 2021; Van Dijck et al., 2018). Second, regulatory bodies are not prepared to grasp the opaque mechanisms hidden in “the black box” of the algorithms employed by platforms (Brevini and Pasquale, 2020; Hendrikse et al., 2021). Third, in the absence of a concerted effort at a global level, national authorities remain essentially toothless to prevent common offshoring practices for tax evasion (Bryan et al., 2017; Fernandez and Hendrikse, 2020). Fourth, digital platforms have already acquired tremendous economic and political power and gained a sort of status “too big to break up” (Roderick, 2014). Fifth, states are becoming more reliant on collaboration with platforms concerning security issues and emergencies as in the COVID-19 pandemic (Rikap, 2020: 21). That said, however, recent years demonstrate a growing consciousness and will by public authorities against the unchecked power of platforms, the consequences of which remain to be seen.
The commonalities and differences between the American and Chinese Big Techs constitute another theme of the extant literature (Wu and Gereffi, 2018). In that regard, the political economic and institutional environment of the two Big Tech booms come to the front as key explanatory variables that lead to different paths. While the US tech boom emerged as a response to a crisis situation “after a long downturn” (Srnicek, 2017) in a deregulated setting, the Chinese boom occurred in a context of an economic upturn marked by China's unrivaled growth rates and on a terrain in which the hand of the state is remarkably visible (Davis and Xiao, 2021). As a corollary, the techno-libertarian logic of the US Big Techs is typically juxtaposed against the techno-statist logic of Chinese Big Techs (Gruin, 2019; Plantin and De Seta, 2019). On the other hand, several studies showed how the Chinese boom has also been heavily reliant on investments from the United States and thus subject to the same dynamics of financialization and commercialism as their western counterparts (Fuchs, 2016; Jia and Winseck, 2018; Zhang, 2020). Similarly, selective strategic alliances between Big Techs and the US state, for instance concerning policing (Ferguson, 2017), also demonstrate the limits of talking about a libertarian, deregulated setting as a distinct feature of the US platform landscape.
A more important point is that most of the existing literature focuses solely on the US and Chinese cases. Given the sheer scale of these firms, this is quite understandable. This spotlight, however, leaves out emergent dynamics concerning platformization in the rest of the world. Home-grown platforms in other parts of the world have only recently begun to attract scholarly attention, yet the number of studies that have analyzed the emergent digital platform landscapes in places other than the United States and China remains limited. 1
Here, I aim to shed light on the process of platformization in Turkey, a middle-income country, which, to the best of my knowledge, has not been scrutinized along these lines in a systematic manner. In doing so, I seek to demonstrate that platformization is not a process limited to the United States and China, but that it operates at a global level, in an uneven form, and with significant economic, social, and political implications.
The Turkish case: Digital transformation, e-commerce, and platformization of the economy
Since platform economies presuppose an infrastructure, it makes sense to start with certain fundamentals concerning digital transformation. While Turkey's first connection to the internet dates back to 1993, the user base began to expand only in the second half of the 1990s. Broadband subscription and personal computer ownership, however, remained limited in comparison to Global North throughout the 2000s. Similar to China (Davis and Xiao, 2021), internet access was made available to wider segments of the population only through the spread of smartphones. As of January 2021, Turkey had an internet penetration rate of 77.7% (65.8 million people), ranking above the world average (59.5%) but below the EU average (84%). Social media penetration, on the other hand, rose from 63.7% in 2020 to 70.8% in 2021, well above the world average of 53.6% (Hootsuite, 2021). Rapid growth in digital penetration in recent years along with the availability of room for further growth due to the still unsaturated characteristics and the relatively large and young population dynamics render Turkey a promising market for digital services.
Digital monopolies can sprout in a variety of business areas (social media, hardware, search engines, e-commerce). In most of these areas, there are no Turkish equivalents. There have been some government-supported attempts to popularize “local and national” search engines, messaging apps, or social media sites, but their reach has been highly limited. Thus, in these domains, the Turkish market is firmly dominated by Big Techs. There is a different story, however, concerning the realm of e-commerce. In this domain, there is a rapidly growing market that has generated a number of “home-grown” platforms along with accumulation dynamics similar to the overall trends of platformization.
The history of e-commerce dates back to the early 2000s when a number of existing retail firms began to offer digital services along with the emergence of the first e-marketplaces. The industry followed a steady but rather slow growth for about a decade before picking up speed in parallel to the increasing availability of smartphones. As of 2021, Turkey had an e-commerce penetration rate 2 of 48%, ranked 39th in the world, below Argentina (58%) and Brazil (54%) and above India (46%) and Russia (45%) (Statista, 2021: 11). The total revenue of the Turkish e-commerce market rose by 43% from 7.9 billion $ in 2019 to 11.3 billion in 2020, with a rampant annual growth rate of 43%. Similarly dramatic increase is visible in other related indicators as well. Over the same year, the ratio of e-commerce to total commerce jumped from 9.8% to 15.7%, while the share of e-commerce in total GDP rose from 2.7% to 4.1%. Furthermore, the number of firms that are involved in e-commerce rose from 68,000 to 257,000 (E-Ticaret Bilgi Platformu, 2021). This suggests that the Covid-19 pandemic contributed significantly to these trends. Yet, it should be noted that the overall growth rate of Turkey positively deviates from global trends. In terms of CAGR (compound annual growth rate), while the global average is 6.3%, Turkey (14.6%) is the fastest-growing retail e-commerce market in the world (Statista, 2021).
E-marketplaces, firms that operate entirely online and offer a variety of products in different categories, are the most important category in the realm of e-commerce. Two of the companies portrayed below belong to this category. In 2019, there were 306 active e-marketplaces operating in Turkey (Deloitte, 2020). Yet, despite this relatively large number, the market is dominated by just a handful of companies, a phenomenon that has been intensifying in recent years. Until 2018, there was a rather balanced distribution of market share among top players. Hepsiburada was the market leader with the four other firms following closely behind. After 2018, however, the picture began to change dramatically. While Hepsiburada managed to maintain a significant market share, Trendyol rose as the new decisive market leader, thanks to an aggressive growth strategy. From 2018 to 2020, the market share of top two firms rose from 56.1% to 70.1%, reflecting a rapid intensification of market concentration over the course of just 2 years (Turkish Competition Authority, 2021). As of the end of 2020, Trendyol had an unrivaled dominance in the market, accounting for a massive share of 50.7% in net sales. While Hepsiburada accounted for 19.4%, the closest follower, Çiçeksepeti, had merely a share of 5.7% (Statista, 2021). According to a recent survey, 61.9% of consumers have Trendyol app and 39.9% Hepsiburada app on their mobile phones while 37.5% of sellers regard Trendyol and %17.9 Hepsiburada as their “indispensable business partner” (Turkish Competition Authority, 2021: 76, 92). The market is thus showing clear signs of an oligopolistic concentration pattern.
Company profiles
Hepsiburada
Hepsiburada (literal meaning: everything is here) was founded in 2000 by Hanzade Doğan as a firm under the Doğan group, a decades-old conglomerate best known for its operations in the media industry. Since then, it has been among the leading firms in the e-retail business. Until 2015, Hepsiburada followed a model known as the Direct Sales Model, in which the firm bought items from suppliers on a wholesale basis and then sold these to consumers. In 2015, the firm also began to operate a marketplace model, in which registered merchants sell their products directly to consumers through the Hepsiburada site, thus transforming itself into a hybrid platform. As of September 2021, 70% of the Gross Merchandise Value of the company came from the marketplace (Hepsiburada, 2021).
In recent years, the platform expanded its operations by founding associate firms in adjacent areas. It now operates its own logistics firm (HepsiLojistik), last mile delivery service (HepsiJet), payment system (HepsiPay), and personalized ads and data insights services (HepsiAd). Moreover, the platform now encompasses a number of affiliate services, enabling its customers to purchase grocery and essentials shopping, products from international merchants (HepsiGlobal) and online airline tickets (HepsiFly). HepsiJet typically hires couriers as independent “business associates,” who need to have their own companies and vehicles, and pays them on a piecework basis. This way, Hepsijet evades responsibility for insurance and accident costs while the couriers are compelled to work for longer hours and under greater pressure.
The active customer base (number of people who purchased at least one product in the last 12 months) of Hepsiburada exhibited a 38% CAGR, growing from 4.8 million in 2018 to 10.7 million in 2021, while the number of active merchants rose from 12,000 to 67,000 in this period. Gross merchandise value, on the other hand, reached 16.8 billion TL, for the three quarters of 2021, representing a 54.9% year-to-year growth rate from 2020 (Hepsiburada, 2021).
In 2015, Abraaj Capital, a Dubai-based private equity firm, bought 25% of the stakes of Hepsiburada. In May 2021, Hepsiburada applied to the US Securities and Exchange Commission and became the first Turkish company ever to be listed in NASDAQ, which is in itself an interesting phenomenon. At its initial public offering, it raised more than 680 million $ and was valued at 3.9 billion $ (Bloomberg, 2021a). The fact that Hepsiburada is now a listed company enables us to access detailed information about the company's balance sheet, income statement, and cash flow statement. As mentioned previously, this is not the case for the other two highlight companies (Trendyol and Getir), rendering it impossible to conduct a systematic comparison among them. Due to the SEC disclosure requirements, however, this data only goes back to 2018, hence not allowing us to observe long-term trends. Yet, we can still generate useful results by analyzing the publicly available data of Hepsiburada, in comparison to the overall trends in the Turkish capital markets and in conversation with the themes raised in the literature.
A highlight that comes from the financial statements of the company is that it has been running up losses most of the time. While the company has realized huge growth in terms of net sales (from 1.95 billion TL in 2018 to 2.60 billion TL in 2019 to 6.36 billion TL in 2020), it has registered a net loss of 51.5 million TL in 2018, a net profit of 101.1 million TL in 2019 and again a net loss of 181 million TL in 2020. A closer look reveals that the main reason behind this is the dramatic increase in the share of advertising in the overall expenses of the company. From 2018 to 2020, while labor expenses rose from 130 million TL to 325 million TL (%150 increase) and administrative expenses from 155 million TL to 579 million TL (%275 increase), advertisement expenses jumped from 93 million to 646 million (%597 increase) in the same period. As of September 2021, advertising expenses reached 843 million TL (SEC, 2021). This finding is in line with the patient capital phenomenon in the platform model in which investors sacrifice short-term profits to reap off the benefits of future market dominance. Figure 1 puts Hepsiburada's financial accounts into perspective with nonfinancial companies in the Turkish Stock Exchange. 3 Accordingly, Hepsiburada comes out as the firm with the highest market capitalization among the firms with a negative profit ratio, underscoring the divergent path of Hepsiburada among other big companies and demonstrating the impact of the patient capital phenomenon.
Hepsiburada in comparison with nonfinancial companies in the Turkish Stock Exchange.
Trendyol
Trendyol was founded by Demet Mutlu in 2009 as an e-commerce platform with a focus on fashion products. The company took off with a capital of about 300,000 $ before receiving investments from a number of venture capital funds between 2010 and 2012 (Techcrunch, 2011). A negligible player until 2015, the company gradually expanded its scope and share in the market thereafter. Its great leap forward moment, however, came in 2018 when the Chinese giant Alibaba purchased 75% of the company for 728 million $. With this investment, Trendyol became the first “unicorn” of Turkey. With additional investments in 2020 and 2021, Alibaba's share in the company rose to 86.5% (Bloomberg, 2021b). At another round of funding in August 2021, it raised another 1.5 billion $ from a range of investors including US-based General Atlantic and Princeville Capital, Japanese SoftBank Vision as well as sovereign wealth funds from Qatar and the UAE. The company is now valued at 16.5 billion $, becoming the first Turkish firm to acquire the title of “decacorn” (a term for startups that have surpassed a valuation of more than 10 billion $) (Techcrunch, 2021). More importantly, these figures suggest that only in 11 years, Trendyol has become by far the most valuable company in Turkey, dwarfing even the largest and decades-old Turkish industrial firms.
After the takeover by Alibaba, Trendyol quickly became the top player in the market. Thanks to the financial power acquired by the Alibaba takeover, it has since pursued an aggressive advertisement activity (with a generous budget that is significantly higher than its rivals; Turkish Competition Authority, 2021: 164) and is now regarded as the absolute leader of the market. In 2019, it had a 35% market share, while in 2020 it obtained a %50 market share. In 2020, the platform served around 30 million customers and delivered 347 million packages.
Similar to other platform patterns, it has expanded its operations, founding associate firms in neighboring industries. It now has an R&D firm specialized in natural language processing for the Turkish language and AI applications (Trendyol Tech), a last mile delivery firm (Trendyol Express), an instant grocery and food delivery firm (Trendyol Go), a customer-to-customer secondhand channel (Dolap), a digital wallet (Trendyol Pay) along with its own fashion brands Trendyol Milla and Trendyol Man. The last mile delivery firm of Trendyol follows the same hiring model as Hepsiburada. Currently, the platform is seeking to achieve the super-app status that combines all the functions (retail e-commerce, grocery and food delivery, hotel and flight booking, payment, etc.) in one mobile app, demonstrating the role of the data imperative for the company.
In 2020, Trendyol initiated a support program called “enlarge your business with Trendyol” targeting SMEs (small and medium-sized enterprises) together with TOBB (Union of Chambers and Commodity Exchanges of Turkey, a semipublic business organization that is dominated by SMEs). Through this program, Trendyol offers trainings for e-commerce and digital transformation to SMEs along with a special opportunity of zero commission sales at Trendyol for up to 30,000 liras (TOBB, 2020). This program has enabled Trendyol to expand its supplier base, but also tighten its grip on producers. As of 2021, Trendyol works with 98,000 merchants, the overwhelming majority of which are micro-enterprises and SMEs. The company has also generously contributed to state campaigns during the pandemic, granting a 5 million TL worth health-related products to the Ministry of Health along with a 1 million TL worth donation to the National Solidarity Campaign declared by the President's Office (Durdak, 2020). As of 2020, Trendyol has also gone abroad by launching an international site serving 27 European countries. This move, the consequences of which yet remain to be seen, is regarded as part of a broader strategy of Alibaba, which faces challenges in penetrating Western markets directly as a Chinese firm, for global expansion (Ayaydın, 2021a).
Getir
Getir was founded by Nazım Salur in 2015. Unlike Trendyol and Hepsiburada, it is not an all-inclusive e-marketplace, but an ultrafast delivery platform for grocery and essentials with an ambitious promise of delivery time under 10 min. In the initial stage, the company received seed investments from Yandex CEO Arkhady Veloz (Genç, 2020). Starting up its business in Istanbul, it rapidly expanded to other cities. The high performance of the company attracted investors across the globe, rendering Getir a rising star in the startup universe. At the funding round in June 2021, the company received investments from a number of venture capital funds including the UAE-based Mubadala along with the US-based Silver Lake, Sequoia, and Tiger Global, reaching a valuation of 7.5 bn $ (Bradshaw, 2021). The latest round in March 2022, led again by Mubadala, catapulted the firm to an astonishing 12 bn $ valuation (Reuters, 2022).
As of December 2021, Getir operates in all 81 Turkish cities, has 3.5 million active users, and delivers more than 75,000 packages daily. Getir initiated a wave of acquisitions as well, buying up Blok, a fast delivery firm mainly operating in Southern Europe, in July 2021, Moov, a Turkish digital car rental service, in August 2021 and Weezy, a UK-based online supermarket platform, in November 2021 (Crunchbase, n.d.).
Getir operates with a different business model than e-marketplaces. Its profits mainly derive from online selling of groceries and essentials at marked-up prices along with delivery fees. The company operates warehouses (the so-called “dark stores”) that are strategically located in the neighborhoods to enable delivery under 10 minutes. The dark stores work with a franchise model, in which Getir is responsible for product quality and pricing and the franchising warehouse for the actual shipping. Recently, Getir has also begun to shift to the business associate model for couriers as well. The company has proliferated its services, combining differentiated services in its app. Apart from the ultrafast delivery function, it also offers services for larger purchases (Getirmore) with a 30-min delivery time, products directly from local shops (Getirlocal), food delivery (Getirfood), drinking water delivery (Getir water), and taxi services (Getirbitaxi).
A distinctive feature of Getir is the weight of its abroad operations. After its remarkable success in capturing the Turkish market in a very short time span, Getir began to expand its operations beyond Turkey by opening its first abroad branch in London in January 2021. As of December 2021, Getir has operations in 29 cities in eight foreign countries (UK, Germany, Spain, the Netherlands, Italy, France, Portugal, and the United States). In its abroad operations, the company is strategically focusing on urban centers mostly populated by younger and relatively wealthier population segments that are willing to pay extra for basic needs.
Institutional and regulatory dimensions
Until recently, it was not possible to talk about a systematic state strategy concerning digital transformation in Turkey. Recent years, however, saw a more hands-on approach by the state concerning this issue. In this regard, The Office of Digital Transformation was established directly under the Presidency in 2018. In 2019, this Office declared a strategy document called “national technology and digital Turkey,” which formulates the priorities and aims within the realm of digital transformation. Underscoring the importance of big data and artificial intelligence for future development, the document states: “by combining the opportunities of science and technology with the targets of our country and our nation, we will prepare all our institutions, public and private, to this great transformation.” In line with this, the Office undertakes several projects in a number of areas ranging from digital transformation of public services, R&D, and maintaining cyber security. The Office also emphasizes the importance of tech startups for the Turkish economy. In cooperation with the Office, The Minister of Industry and Technology stated that they have a target of having 10 unicorns (reworded as “Turcorns” by the Ministry) by 2023, the centenary of the Republic (CBDDO, 2021).
An overall evaluation concerning the institutional setting of the tech setup in Turkey would yield the following conclusions. The fact that digital transformation has become a state priority only in the last three years demonstrates that Turkey is lagging well behind advanced cases in this regard. Furthermore, in terms of R&D expenditure's share in GDP, Turkey's score (a mere 1.09%) was well below the OECD average (2.5%) (OECD, 2019). Given these limitations, the rise of the three highlight companies does not seem to be the product of a systematic state policy as in China. Yet, the growing attention of state bodies to this realm might mean that tech startups and already well-established firms will enjoy greater support from public authorities. Thus, it is likely that this will speed up the process of platformization.
In recent years, regulatory attempts targeting the monopolization dynamics have echoed in the Turkish landscape as well. In this regard, Turkish Competition Authority has issued a report analyzing the competition dynamics in the e-marketplace industry. The report highlights the increasingly oligopolistic structure of the market and the growing dominance established by the leading firm, Trendyol through network externalities along with the growing pressures over supplier firms working with the company. The report also warns that the asymmetric dominance of Trendyol along with diminishing shares of other major players in recent years might trigger a wave of M&As that would lead to further consolidation of monopolization (Turkish Competition Authority, 2021). Noteworthily, the board decided to open an investigation to Trendyol on allegations of favoring its own firms against other third-party sellers in the marketplace (Dünya, 2021). Soon after, however, the head of the investigation team was transferred to Trendyol as the Chief Regulation Officer, leading to a controversy over ethical violations (Ayaydın, 2021b). The consequences of this investigation remain to be seen. Yet, given the sheer scale of the company along with its pivotal position in the logistics networks that tie a significant base of producers across the country to consumers and the generous support programs in cooperation with state and semipublic institutions, it seems unlikely that the company will face serious sanctions that could significantly alter the current trends in the industry.
Overall findings
The evolution of these three firms gives us the opportunity to discuss the impact of platformization in the case of Turkey. Their development from mere startups into digital giants with market values surpassing those of established industry conglomerates in a tremendously short time demonstrates that platformization is rapidly transforming the Turkish corporate scene (Figure 2). Accordingly, from 2020 to 2021, three digital platforms rose to the top league of Turkish corporations in terms of market value. While Trendyol became the most valuable firm by a wide margin, Getir holds the third position and Hepsiburada is the eleventh. Their combined market value makes 30% of the top 15 list. This trend demonstrates the exorbitant growth rates of digital platforms and their increasing weight in the domestic economy.
Hepsiburada and nonfinancial companies in the Turkish Stock Exchange.
The examination of the growth strategies of the concerned companies in conversation with the themes highlighted in the global literature, on the other hand, reveal a convoluted pattern. Table 1 summarizes the highlights of the Turkish platform landscape in comparison with the US and Chinese cases.
Comparative platform landscapes
Generally speaking, the Turkish case exhibits similarities with the overall business models of platform giants in terms of several aspects. Data imperative, network externalities, aggressive growth strategies based on capturing market share as rapidly as possible, intensifying M&A activity to buy out potential rivals along with the expansion of activities into adjacent business areas stand out as well-known features shared by the emerging Turkish platforms. Concomitantly, the rise of digital platforms has brought forward certain novel dynamics in labor markets toward what is known as the “gig economy.” The last couple of years witnessed growing grievances against the worsening conditions of workers in the platform industry, specifically those of the couriers. The first months of 2022, on the other hand, saw an unprecedented wave of labor unrest among platform couriers that started in Trendyol, rapidly spread to other firms, and ended with considerable gains (Polat, 2022). The fact that a sector filled with workers with very little organizational experience witnessed one of the most massive unrests of recent years is reflective of the impact of platformization for labor, in terms of both scale and the level of pressure platform workers are facing.
A noteworthy characteristic of the scrutinized companies is that they remain dependent on Big Techs. All three firms rely on the infrastructure laid by Big Techs, particularly concerning web services. Among them, Trendyol comes out as the one that has the most generous budget in research and development with a separate technology branch. Yet, it mostly focuses on natural language processing algorithms for the Turkish language. Thus, for the Turkish case, it is not possible to talk about an autonomous innovation program aiming to overcome the dependency on Big Techs. That said, however, Van Dijck et al.’s (2017) “sectoral platform” distinction does not satisfactorily capture the evolution of the Turkish platform landscape. Although all three firms started as online retail companies, they are rapidly expanding their businesses, entering into other domains such as hospitality, logistics, as well as production. Along with their structural dependence on Big Techs, it can be claimed that they are pursuing an infrastructural expansion at a national scale. This suggests that in the case of Turkey, platformization is proceeding at an uneven and dependent manner, generating dynamics that transcend the infrastructural vs sectoral differentiation put by Van Dijck et al. (2018).
Another crucial aspect of divergence of the Turkish case from Big Techs, on the other hand, seems to be the financial strategies. While Big Techs have immensely benefitted from capital markets by going public in the last decades, this is a dynamic that is mostly absent in the Turkish case. A possible reason is the relative shallowness of Turkish capital markets. In this regard, it is also noteworthy that Hepsiburada became the first Turkish company to be listed in NASDAQ through its initial IPO in July 2021. Limited presence in capital markets, however, should not lead us to the conclusion that financialization is not a pertinent issue in the Turkish platform scene. Turkish firms have instead relied on attracting venture capital funds to achieve rapid market dominance. The examination of the financial structure of Hepsiburada reveals that it benefits from a financial leverage significantly higher than nonfinancial firms in traditional industries, in line with the patient capital phenomenon. The fact that Hepsiburada went public on a US-based stock exchange, Getir receives funding prominently from the US and UAE-based venture capital firms, and Trendyol was acquired by Alibaba is significant in terms of the financial strategies of these companies. Yet, taking into consideration that Alibaba itself is a company that raises massive capital from the US-based stock exchanges and venture capital funds, it is possible to conclude that platformization in Turkey is eventually linked with financial institutions in the US. On the other hand, the extraterritorial presence of these actors in the Turkish platform landscape suggests that Turkey is increasingly turning into a stage where the rivalry between the US and Chinese tech firms play out. Overall, the ongoing patterns suggest that the monopoly power of the concerned firms is likely to be further consolidated in near future, with profound impacts on not only in e-commerce markets but also in the overall capital accumulation dynamics and labor relations.
Concluding remarks
In this paper, I presented an assessment of the Turkish platform landscape. To this end, I first discussed the extant literature on platformization, emphasizing various factors that led to the rise of digital platforms such as financialization, data-driven business models, and the drive for monopolization. In that regard, I indicated the gaps in the literature concerning the dynamics of platformization in places other than the United States and China. Working toward a more global view, I scrutinized the Turkish case by focusing on three companies in the e-commerce industry, the most prominent domain exhibiting dynamics of platformization. The highlights of my findings can be summarized as follows. First, although Turkey is not among the largest e-commerce markets in terms of volume, Turkish e-commerce markets are growing very rapidly and increasing their share in the domestic economy. Second, these markets have generated a number of firms that have exhibited meteoric growth rates in recent years. The most emblematic evidence of this is that the three highlight digital platforms have climbed up to be among the most valuable companies in a tremendously short period. This demonstrates that platformization of the economy is taking place in Turkey, albeit in an uneven form. Third, the strategies of these companies are generally in line with the findings emphasized in the literature. The data imperative, thriving on network effects, utilizing financial leverage, expanding to adjacent business lines, and pursuing an aggressive competition strategy to obtain a decisive market share come out as crucial dynamics in the Turkish platform scene. Fourth, the Turkish platforms remain dependent on American and Chinese Big Techs, particularly for web services. Fifth, an analysis of the market shares in the e-marketplace industry indicates a strong monopolization drive. These trends are expected to be further consolidated in near future. Sixth, the tech boom in Turkey does not seem to be the product of a systematic state strategy. There are, however, recent attempts to support and shape digital transformation in line with the strategic priorities of the government. The consequences are yet to be seen. Finally, platformization is indeed rapidly transforming the Turkish corporate scene, which suggests that the concerns over the unchecked power of platforms should not be limited to the US and Chinese cases. The overall findings indicate the necessity to expand the geographical span of the platformization literature and to further elaborate on the political, economic, and social dynamics of this drive with more detailed field studies as well as comparative cases.
Footnotes
Acknowledgments
The author would like to thank Tobias John Klinge for his generous support at various stages of this research, the other members of the REFCOM research group at KU Leuven for their valuable feedback on previous versions of this article, along with Nefize Ezgi Altınışık and Gürsan Şenalp for their keen guidance.
Declaration of conflicting interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author received no financial support for the research, authorship, and/or publication of this article
