New ecommerce rules spur cost-benefit debate in Turkey

• Rules require more data in listings
• Taxation on some transactions
• May discourage international retailers

Turkish officials have denied media reports that they were about to block access to the popular Chinese online shopping platform Temu after it allegedly failed to comply with new regulations governing ecommerce.

This has highlighted the debate in Turkey around the cost and benefit for the multi-billion dollar industry following this month’s introduction of the new regulations.

As of April 1 all international online companies operating in the Turkish digital space are required to appoint a representative responsible for ensuring that they comply with domestic regulations.

Ecommerce companies, both international and domestic, are also now required to provide comprehensive details on their sites for each listing, including maker’s name, safety data and contact information.

While the April 1 regulations are generally a positive step, their introduction also means that some platforms have left the marketplace, putting Turkey at risk of being isolated from global players, Fehmi Darbay, chair of the executive board for the Electronic Trade Association (ELİDER), told AGBI.

“Instead of introducing bans, we should invite strong global firms that would contribute to our country’s producers and our country’s products via ecommerce,” he said.

One of the reasons for the government pushing retail platforms to have representation in the country is to create a shopfront to address consumer complaints. 

A study by consumer affairs platform Sikayetvar found that ecommerce transactions attracted the highest level of buyer dissatisfaction last year, with more than 400,000 complaints lodged. This by far exceeded complaints about the second-ranked internet service providers, or banking and finance.

In addition, having a representative in Turkey means that ecommerce platforms are now subject to Turkish taxation on at least some of their transactions, something which not all are willing to accept.

“We would gain by welcoming these companies and setting conditions,” said Darbay. “Such as allowing them to conduct ecommerce exports from Turkey but requiring a certain percent of their operations be opened up to Turkish firms, opening up Turkish products to the world.”

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The government has also sought to dampen the Turkish public’s appetite for online shopping on international platforms, lowering the duty-free rate for international purchases from €150 ($170) to €30 in mid-2024 and to €27 in December of that year. 

Any purchases over that value are now subject to customs duties, with documentation of proof of invoices or payment to be submitted by the buyer.

Turkey is a major ecommerce importer but rather than impose restrictions on this trade, the government should try to encourage growth in the ecommerce export sector, Darbay said, with the objective of lifting ecommerce exports to 10 percent of the national total by 2028. 

That has begun to some degree, with Turkish ecommerce exports climbing from $2.2 billion in 2022 to $6.4 billion last year, according to Mustafa Gültepe, president of the Turkish Exporters Assembly. The government is forecasting this to rise to $8 billion this year. 

“What we must aim at is for Turkish businesses to open up globally and help them be able to sell abroad,” said Darbay.