Lira sell-off creating investment interest
Alibaba (BABA) is among several large Chinese companies that recently met with Turkish companies to discuss issues believed to be about investments and acquisitions, according to a Reuters report citing confidential sources. The lira, the Turkish currency, has tumbled this year, making local assets cheaper. That could be the reason Alibaba, China Merchants, and China Life Insurance are showing interest in Turkish assets. They’re reportedly interested in buying or investing in Turkish mining, energy, insurance, and retail industries.
Turkey boasts a large, young market
Earlier this year, Alibaba bought a stake in Trendyol, an online marketplace operator based in Turkey. The country is home to about 80 million people, according to World Bank figures, and has one of the youngest populations in the European Union. That makes it a particularly attractive market for companies such as Alibaba with businesses that cater to online consumers.
Turkey is one of the fastest-growing e-commerce markets. Its online retail sales increased 37% to ~42.2 billion lira in 2017, according to the Turkish Informatics Industry Association.
Collision with Amazon
Alibaba’s interest in Turkey may cause a greater collision with Amazon (AMZN), eBay (EBAY), and even JD.com (JD). Last month, Alibaba launched a local e-commerce site in Turkey. eBay has had a presence in the country for years, acquiring Turkish online marketplace operator GittiGidiyor in 2011.
Alphabet’s (GOOGL) Google has a significant presence in Turkey. It ended September with a 94.1% share of the country’s online search engine market, which compares to 4.7% for Yandex (YNDX), according to StatCounter. Google is helping JD.com, a fierce Alibaba domestic rival, expand internationally.