Chicken Soup For Turkish E-conomy

You think it can not be done somewhere else? See Yemeksepeti.com, the first and the leading online food delivey service in Turkey as it successfully delivers tasty eastern flavors on the information superhighway.

The phone rings at a large kebab house near Taksim, the center point of Istanbul in midday, and the young lady at the counter takes up an order for delivery. The customer to be fed is calling from just a few blocks away, but he does not exactly know what they are serving, so the ordering scene lasts on for a while. It is almost eight minutes later that she finally hangs up and passes the order to the kitchen. The customer had so many questions that she is even not sure if she noted everything right.

On the other corner, the restaurants outdated fax machine suddenly beeps up and starts producing another order; only this time in a neat, written format, and not just for one but for five hungry folks in the neighborhood. The order for party of five is picked up by the manager himself, gets scanned quickly for completeness of information and for special requests, and is delivered to the kitchen to be prepared. The whole process takes less than two minutes.

The two orders leave the place at the same time, but the latter gets delivered sooner. Why? We learn that the phone-loving customers order was missing an apartment number, as well as one of the Turkish Pizzas he ordered, making him not just dissatisfied but also angry. By the time his door was knocked, the other five customers have finished their lunch. Its Yemeksepeti.com, the first and the leading online food delivery service in Turkey, what they are thankful for.

The successful e-business venture, one of a handful in Turkey, has been founded by three Turks from Istanbul, all under 25, in early 2001. Since then, the business managed to grow its operations to cover all the suburban areas of the city, with over 300 restaurants, ranging from large American pizza parlors to sushi bars, to fine Italian diners and tiny momn-pop coffee houses. The Company currently has more than 22,000 customers, over half of them keep coming back.

General Manager Nevzat Aydin tells he got the idea as he was attending graduate school in the U.S., back in 2000. Tempted by the early examples of this new business model, Aydin, who had a B.Sc. in Computer Engineering returned to Istanbul and convinced two of his fellow classmates, Melih Odemis and Cem Nufusi to launch the business together. Yemeksepeti.coms vision is simple: To provide users with the fastest and the most reliable personalized service.

One fifth of Turkeys 65 million population is living in Istanbul. And the number of internet users in the whole country is estimated to be not more than 3 million. Even though more than 60% of these users are located in Istanbul, the market is very limited, compared to other developing countries in the region.

So why Aydin and his partners chose to enter this business, which proved to be far from profitable even for companies like the 7-year old, million-dollar pumped food.com of the Silicon Valley? Because nowhere else there is this much density of high-income working people" Aydin says. And if you take corporate folks as your customer, then most of them have internet connections". He says Food.com failed because it wanted to grow nationwide too fast, its service was not customer oriented, and it simply trashed its money on useless advertising, while it could take advantage of word of mouth if it had provided high customer satisfaction". We thought we could do much better staying local, focusing on our customers". Aydin adds that for the restaurants, the cost of going online in Turkey is much higher than in Europe or the States. I simply assumed they would not want to open up their own web sites soon" he says.

Yemeksepeti.com (yemek sepeti: food basket in Turkish), did not enjoy any venture capital or angel help. The founders had to put up whatever they had in their pockets, because it was not a good time for investors. Turkey had experienced a devastating earthquake in late 1999 and it caused a nationwide economic slow down, which stimulated even deeper by a government crisis later in 2001.

There are certain disadvantages to doing what we have done in Turkey", says Nevzat Aydin, such as the incompetent technical infrastructure, poor perception of the internet, low penetration and the way restaurants operate". But Yemeksepeti.com has tripled its growth rate last year. And we plan to double our orders by the end of 2003" says Aydin. So far, the Company have fulfilled more than 134,000 orders. Aydin says the most important advantage of being here is that Turkey is not a ripe market. Competition is yet to arise.

Although Yemeksepeti.com is more of a B2B2C project, Nevzat Aydin sees B2B to be more advantageous than B2C in Turkey. He tells it is because there are still issues with the banking system and security. Consumers do not feel comfortable in using their credit cards online. B2B can be particularly good in one-to-one projects" Aydin says. For example we do not offer a B2B solution to restaurants, because then we have to convince them one by one, to buy from us, instead of their long time suppliers. It is simply too hard for them to break the cycle. If the supplier decides to do it, it may work. On the other hand, the benefit offered by B2C is the opportunity to get the products you can not find around. Turkey is focused only on 5-6 cities and if you are not living in one of them you may want to use internet to fulfill your specific needs."