Turkey's Hepsiburada to prioritise profitability, customer retention -CEO
23/03/2023 13:34
March 23 (Reuters) - Turkey's only listed e-commerce
platform Hepsiburada HEPS.O will prioritise profitability over
rapid growth and step up efforts to retain customers who are
being hit by soaring inflation.
Inflation in Turkey hit a 24-year high of 85.5% in October,
sharpening consumers' focus on costs with increasing numbers
turning to loans or credit cards to pay for more expensive
goods.
Investor appetite for fast, and costly, growth has also
waned as interest rates rise.
"My mandate here is to improve profitability", new
Hepsiburada CEO Nilhan Onal Gokcetekin told reporters late on
Wednesday.
Gokcetekin said the path to improved profitability began
with retaining customers through a company loyalty programme. It
also started offering quicker payment and new lending options
late last year.
"We are the only e-commerce company that has a country wide
payment licence," Gokcetekin said, adding that it plans to sell
payment services to merchants outside its marketplace.
Hepsiburada also plans to further increase sales of more
profitable non-electronic items, after their share of total
sales rose two percentage points to 42% last year.
Gross merchandise volume, a measure of total online sales,
rose 3.7% last year after the impact of inflation was stripped
out, according to an earnings report released on Wednesday.
Order numbers grew 50% and active customers increased by
7.9% from 2021.
However, Hepsiburada's net loss widened to 2.9 billion lira
($152 million) in 2022 from 2 billion lira a year earlier, while
earnings before interest, tax, depreciation and amortisation
(EBITDA) narrowed to a loss of 2.6 billion from a 3.7 billion
loss in 2021.
The company reports its results in inflation-adjusted terms
as Turkey is classified as a hyperinflationary economy per
international accounting rules.
It expects to breakeven at the EBITDA level in the first
quarter, unadjusted for inflation, despite a contraction in
demand after a major earthquake in February. That compares with
a 7 million lira EBITDA loss in the last quarter of 2022.
E-commerce is still growing in Turkey. Gross retail sales
increased by 114% to 4 trillion lira ($210.10 billion) last
year, with e-commerce accounting for an 11% share, industry data
showed.
($1 = 19.0411 lira)
(Reporting by Can Sezer; Editing by Kirsten Donovan)
((can.sezer@tr.com; +90-212-350 7055; Reuters Messaging:
can.sezer.thomsonreuters.com@reuters.net))