The Berlin-based e-business cloner and incubator Rocket Internet quit Turkey not even a year after the initial launch. After 10 months of sporadic activity, Rocket Internet shut down its entire operation and fired the complete staff of 400.
Rocket Internet was selling know-how and site templates to Turkish e-commerce sites and testing the water for more than a year before its entry to the country. Despite the due diligence, the rumors of impending doom were common since almost immediately after the company’s launch of its first site, Sporena. In June, the company consolidated several departments, and—while preserving the IT core—let go of the sale teams. “It is a wonder they held on this long,” said a major competing retail’s manager, who wishes to remain unnamed. “They were stocking up in thousands merchandise we couldn’t push out in hundreds.”
Perhaps this is one of the reasons why the margins were reportedly low for the business. Rocket Internet famously hired at 2.5x standard wage a highly qualified team of well-educated (usually abroad) talents, who, incidentally were not always familiar with the Turkish market. Whether the bad business decisions were due to unrealistic expectations, or something more sinister in a company that motivates its directors with a fat budget, is impossible to know.
Rocket Internet, to this hour, has not made an official declaration of its exit from Turkey. However, the official Turkish office link is down with the message: “You are not authorized to access this page.” In a more revelatory move, the staff has tweeted a rather cheerful group photo of their last time together as a team, and one particular tweet was thankful for everything through the highs and lows.
No doubt the causes of failure in such a ripe market will be debated extensively in the professional circles. In another what was seemingly a no-brainer market, Turkish retail leader Markafoni pulled out of South Korea after several successful international attempts. Sometimes, the cultural differences are too fine, and sometimes, the competitors are already in place. Thankfully, Turkey’s internet commerce is too strong for this event to set a bad precedent.