The document provides an overview of the Turkish business environment and retail sector. Key points include: 1) Turkey has a young population, strong economic growth, and strategic location between Europe and Asia, making it an attractive market for investment. 2) The retail sector has traditionally been composed of small shops but is becoming more modern, with supermarket sales growing rapidly in recent decades. 3) The retail sector is expected to continue expanding significantly due to Turkey's growing economy and consumer base.

1. Overview of the Turkish Business
Environment & Retail Sector in Turkey
Demet Ozdemir
Partner, Transaction Advisory Services
February 2012

2. Doing Business in Turkey
Page 2 Turkish Business Environment & Retail Sector in Turkey

3. The business environment to invest in
Turkey is quite favourable …
Why Turkey is a good market to invest in…
GDP (US$ billion) ► Situated at the junction of Europe and Asia, Turkey is an
important crossroad between Europe, the Middle East and Asia,
1.600 1.456,3 facilitating easy access to 1.5 billion customers
1.400 1.282,1
1.200 1.081,5 ► 16th largest economy in the world with leading industries; energy,
1.000 885,4 telecommunications, agriculture, automotive, manufacturing,
US$ bln
729,8 749,2
800 646,2 614,5 textiles, tourism, transportation and construction
482,4 528,2
600 392
400
► Booming economy (US$ 305 billion to US$ 749.2 billion GDP
200 from 2003 to 2010) with sustainable economic growth.
0
2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F
GDP (US$ bln)
F:Forecasted
Source: Global Insight, Undersecretariat of Treasury GDP per capita and Real GDP growth
GDP Growth Rate (between 2001-Q1 and 2010-Q4) 18.000
9,0%
13.734
14.000 9,0% 12.489
8,2% 11.263 6,0%
15% 10.241 10.054 10.443 9.773
10% 10.000 8.530
4,5% 4,9% 3,0%
US$
5% 3,6%
0% 6.000 0,0%
0,7% 1,3%
-5%
2.000 -3,0%
-10% Uninterrupted growth for 27 quarters
-15% -2.000 -4,8% -6,0%
2001Q1
2001Q2
2001Q3
2001Q4
2002Q1
2002Q2
2002Q3
2002Q4
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
2006Q3
2006Q4
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2008R 2009R 2010R 2011F 2012F 2013F 2014F 2015F
GDP per capita Real GDP growth
Source: Global Insight, Undersecretariat of Treasury
Source: Global Insight
Page 3 Turkish Business Environment & Retail Sector in Turkey

4. …with the youngest population in Europe
and favorable demographics…
Strong growth potential… ► 3rd largest country by population in Europe following Russia and Germany
Population of European Countries (million) ► Largest youth population compared with the 27 EU countries
► Youngest in Europe with 43% of it is comprised of under the age of 25
160 141 ► The population between ages 0 and 44 is 55.5 million constitutes 74% of the total
140 129 population
120 ► Labor productivity with an annual average growth of 6.1% between 2002 and 2008
100 82
80
74 65 62
► 4th largest labor force compared to the 27 EU countries
60
60 46 ► One of the largest consumer markets in Europe with an increasing number of potential
38
40 21 16 customers
20
► High level of productivity and highly skilled labor force
0
Contribution to GDP growth
15% 8,90% 10%
Source: Council of Europe 8,20%
6,90% 8%
10%
Population Distribution by Age 4,70% 6%
5% 4%
30%
26%
2%
25%
0% 0%
20% 17% 17% 0,70%
14% -2%
15% -5%
11%
-4%
10% 8% 7%
-10% -4,70% -6%
5% 2005 2006 2007 2008 2009 2010
0% Private Cons. and Inv Gov. Cons. and Inv. Net Export
0-14 15-24 25-34 34-44 45-54 55-64 65+
Stock Building GDP Growth
Source: Turkish Statistical Institute
Source: Global Insight, Turkish Statistical Institute
Page 4 Turkish Business Environment & Retail Sector in Turkey

5. …and improving macroeconomic stability…
Macroeconomic indicators are strong despite the global financial crisis…
► The Central Bank of the Republic of Turkey (“CBRT”) maintained high
Interest Rates of Turkish Government Bonds interest rates while the government followed a tight fiscal policy by
16% 15,00% achieving 5.5% primary surplus in order to decrease inflation to the
14% targeted levels in the past 6 years.
12% ► Turkey has a potential of being a safe harbor in the post financial
10% turmoil; credit ratings improved during global financial crisis.
8% 6,50% 6,50% 6,75% ► 3 Dec 2009, Fitch upgraded rating by two notches from BB- to BB+.
5,75% 6,00%
6% 5,50% 5,50%
► 8 Jan 2010, Moody’s upgraded rating from Ba3 to Ba2.
4%
2% ► 1 Feb 2010, JCR raised rating from BB- to BB.
0% ► 19 Feb 2010, S&P upgraded rating from BB- to BB and revised
2008A 2009A 2010A 2011F 2012F 2013F 2014F 2015F outlook from stable to positive
Interest rate ► Very strong banking system and minimum level of distressed
Source:Global Insight companies despite GDP decline in 2009
Consumer & Price Index (% change) Banking sector, ROE and NPL ratios
25,0% 23,4% 6,0%
15% 12,7%
11,1% 19,8%
20,0% 17,7% 5,3% 5,0%
8,5% 7,8%
10% 6,3% 4,0%
10,4% 5,1% 5,2% 4,7% 15,0%
9,8% 3,7% 3,7%
8,8%
ROE
NPL
5% 8,6% 3,0%
6,3% 6,5% 10,0%
1,2% 4,7% 4,6% 4,5% 2,0%
0%
5,0% 1,0%
2007A 2008A 2009A 2010A 2011F 2012F 2013F 2014F 2015F
-% -%
Consumer Price Index(% change) Wholesale Price Index(% change)
2008 2009 2010
A: Actual, F: Forecast ROE NPL
Source:Global Insight Source: Banking Regulation and Supervision Agency
Page 5 Turkish Business Environment & Retail Sector in Turkey

6. … where collaboration and cultural exchange
are developing very well
…and a great country to work in
► Ranked the 15th most attractive FDI destination for 2008-2010
FDI inflows
(UNCTAD)
25
► More than 21,000 companies with international capital
19,3 19,9
20
17,0
► Around US$ 57 billion of FDI inflows in the last 4 years
15,9
15
► “Guarantee of Transfers” and “International Arbitration” available
Billion US$
10,0 ► New R&D and Innovation Support Law dated February 2007,
10 7,8 increased productivity, reduced production costs, commercialized
6,9
technological knowledge, developed pre-competition cooperation
5 2,8
1,8
1,1 ► Accession negotiations with the EU since 2005
0
► Customs Union with the EU since 1996, and a total of 12 free
trade agreements (FTA).
► High demand for energy, with minimum natural resources
Source: Undersecretariat of Treasury
Page 6 Turkish Business Environment & Retail Sector in Turkey

7. Turkey - SWOT Analysis
Strengths Opportunities
► Largest youth population among 27 EU countries ► Strong growth prospects, in nearly all sectors
► Strong geopolitical position which enables the country to be a hub ► Large and growing consumer base
between the Middle East and Europe
► Despite the economic fragility in the world, many companies still
► Promising GDP growth rates have strong balance sheets and are eager for foreign partnership
► Diversity in industrial production
► The government has pushed forward new pension and labor
► Strong consumer base code reforms that should lower labor costs for businesses
► Recent structural reforms, especially those aimed at improving ► Despite risks to the EU accession process, Turkey remains to be
transparency and increasing capitalization within the banking system an important convergence play for investors
► Membership in a customs union with the EU, which makes it a very
► The reform program is expected to increase the opportunities for
attractive platform for export-oriented manufacturers
investment in privatized state firms
► Transparent monetary policy which is geared towards stabilizing
inflation
Weaknesses Threats
► Lack of sophisticated corporate sellers and buyers ► Political priorities / concerns
► Changing / volatile tax regulations; widespread tax evasion ► High degree of exports and dependency on world economic
climate
► Bureaucracy
► Relatively high value expectations of sellers
► Lack of R&D, innovation and high technology in many sectors
► A global economic slowdown will weigh on foreign investment
► Limited coverage of sector data, especially in non-regulated sectors
and the export sector
► Reliance on foreign direct investment inflows to support the balance of
► Infrastructural issues (especially in relatively under developed
payments highlights a strong dependence on key developed world
regions) and the ongoing transportation problems
economies.
► Differences in development levels of the geographical regions
Page 7 Turkish Business Environment & Retail Sector in Turkey

8. Overview of the Retail Sector in Turkey
Page 8 Turkish Business Environment & Retail Sector in Turkey

9. Retail Sector
Sector Overview
Sector Overview Overall Retail Sector – Sales Volume Growth
► The retail market had been composed of traditional shops in Turkey until 400,0
4.315 4.387 4.478 5.000
4.129 4.220
1990’s. For example in the food sector, most Turkish consumers meet their 350,0 3.977 4.500
3.803
daily shopping needs through a variety of smaller shops, visiting the bakkal 4.000
300,0
(small corner store, which is often family run) for packaged food items, the 3.500
2.806
kasap (butcher) for poultry and meat, the manav (greengrocer) for fresh fruit 250,0 3.000
TL (billion)
and vegetables, or the pazar -- a weekly outdoor market found in each 200,0 2.500
TL
neighborhood. 325,2 334,2 344,8 2.000
150,0 289,4 304,0 314,4
269,7 273,5
► After 1990, the opening of the supermarkets brought a new era in the retail 1.500
100,0
market in Turkey and this became the start of modern retailing in Turkey. 1.000
50,0 500
► Currently the retail market in Turkey is a mix of traditional and modern retailing 0,0 0
and the market is similar to the EU market of the 1970s, with an approximately 2008 2009 2010 2011 2012F 2013F 2014F 2015F
56% share held by traditional small domestic retailers. In the EU countries, this
percentage is around 15% and the market is mature and the market dynamics Retail Sales (TL billion) Retail Sales per capita (TL)
are not expected to change significantly. Source: Business Monitor International
► However there is a large room to grow for modern retailing in Turkey in line with Private Consumption vs. Population
the trends in the market.
► In parallel with the macroeconomic growth and stable economic conditions, 78,0 1.600
1.368
retail sales experienced a strong growth between 1998 and 2008 with a CAGR 77,0 1.239 1.400
of 27.4%. Retailing saw positive market growth in 2010, as the sector returned 76,0 1.117
75,0 1.000 77,0 1.200
to its 2008 levels.
Population (million)
74,0 899 76,2
786 1.000
TL (billion)
► The TL 304 billion retail sector size of 2011 is expected to reach approximately 73,0 75,4
664 681 800
72,0 74,5
US$ 345 billion by 2015. The sales volume growth of the retail sector is 73,6
demonstrated in the figure on the right. Moreover, retail sales are projected to 71,0 72,8 600
70,0 71,8
grow with a CAGR of 3.2% from TL 304 billion in 2011 to TL 344.8 in 2015. 70,9 400
69,0
200
► The projected CAGR for the private consumption in Turkey is 11.7%, which 68,0
points out the potential in organized modern retailing in Turkey and the increase 67,0 0
in the household population is one of the major factors behind this growth 2008A 2009A 2010A 2011E 2012F 2013F 2014F 2015F
projection, as demonstrated in the figure on the right. Population (in million) Private Consumption (TL billion)
Source: Business Monitor International
Page 9 Turkish Business Environment & Retail Sector in Turkey

10. Retail Sector
Sector Overview
Sector Overview Retail Sector Breakdown (Food vs. Non-Food), 2010
► According to the Turkish Council of Shopping Centers & Retailers, the volume of
the retail sector is approximately US$ 171 billion in Turkey and the organized retail
market constitutes approximately 44% of the overall market. The total sales area
and the employment figures are respectively 23 million sqm and 1.8 million 41,3%
employees in 2010 according to the data by the Turkish Council of Shopping
Centers and Retailers. Moreover, the Council projects a market size of US$ 279
billion by 2013.
58,7%
► The retail market in Turkey can be separated into five main sub categories, which
are:
► Food Retail
► Home Retail
► Apparel Retail Food Retail Non-Food Retail
► E-Commerce Retail Source: Turkish Council of Shopping Centers and Retailers
► Electronics Retail
► The food retail sub category is the largest category in the sector and it constitutes Breakdown of Non-Food Retail Sector, 2010
58.7% of the market. The breakdown of the retail sector sales volume in 2010 is
demonstrated in the figures on the right. The below figure illustrates the
breakdown of the non-food retail sector into the four main sub categories. Home 10,8%
retail is the largest sub category in non-food retail sector.
13,9%
► In the food sector, most Turkish consumers meet their daily shopping needs 39,3%
through a variety of smaller shops. However, mass grocery retail (“MGR”) outlets
have become increasingly popular thanks to the quality and range of their
products -- boosting demand for packaged foods and the convenience of one-stop
shopping.
► The economic growth, an expanding population, especially in urban areas, rising
levels of disposable income, and the continued development of organized retail
infrastructure, are the major factors for the expected growth in the retail industry in 36,0%
Turkey.
► Furthermore, Consumer Confidence Index has reached 90.99 at the end of 2010 Home Retail Apparel Retail E-Commerce Retail Electronics Retail
in Turkey. Source: Turkish Council of Shopping Centers and Retailers
Page 10 Turkish Business Environment & Retail Sector in Turkey

11. Retail Sector
Sector Overview
Major Trends in the Sector Consumer Spending per Capita
► As with the EU countries, which saw organized retail grow from 51% to 85% of 14.000 12.948
the market in two decades, there is clear scope for rapid Turkish expansion. In 2010 - 2014 CAGR: 16.7%
11.551
12.000
2006, there were just three hypermarkets and 17 supermarkets per 1 million of
9.888
population in Turkey, against 15 hypermarkets and 150 supermarkets in EU 10.000
countries. 8.188
8.000 6.897 6.977
Analysis of retail market share in countries before and after EU accession 6.315
US$
►
5.883
shows that traditional retailers lose almost half of their market share shortly 6.000
after entry to the EU. However, with negotiations having only started in 2005,
actual EU accession for Turkey is still a very long way off and is not expected 4.000
until 2015 at the earliest. 2.000
► The growing competition in the market is leading to an increase in brand
0
choice and improvement in brand quality, resulting in growing demand for 2007A 2008A 2009A 2010A 2011E 2012E 2013E 2014E
retail products. This in turn is attracting a large number of leading retail chains
Source: TURKSTAT, Business Monitor International
to Turkey.
► The consumer spending per capita has decreased by 14.7% in 2009 in Turkey
as a result of the global financial turmoil and it increased again back to 2008
levels in 2010. Furthermore, it is estimated that the consumer spending per
capita is projected to increase with a CAGR of 16.7% during the time period
between 2010 and 2014.
► Market penetration is rising in parts of Istanbul and Ankara and these cities
still offer major opportunities for retailers and developers. However there are
even more opportunities in the untapped markets in the rest of Turkey.
► Entertainment and leisure have become a crucial aspect of the new wave of
retail developments. In addition to cinemas and restaurants, developers are
being more adventurous and including entertainment and leisure aspects in
the shopping malls.
► Retail sales constitute 24.2% of total GDP in Turkey and the share of
organized retail is 9 – 10% of the total GDP in 2011.
Page 11 Turkish Business Environment & Retail Sector in Turkey

12. Retail Sector
Mergers & Acquisitions Activity (2008-2011)
Significant M&A activity has been observed in the retail sector in Turkey recently
► The mergers & acquisitions (“M&A”) deals in the retail sector in Turkey in the period between January 1, 2008 and June 31, 2011 are
demonstrated in the below figure. 34 deals have been closed in this period and the deal values of 15 deals have been disclosed with a total
disclosed deal value of US$ 2.65 billion and an average deal value of US$ 176.6 million.
► Furthermore, according to the survey results in the 2011 M&A Report of Ernst & Young, Turkish business world is optimistic regarding the
future of the retail sector in terms of M&A activity in 2012 and approximately 11% of the participants believe that retail will be the most
promising sector in 2012. The survey results are illustrated in the below figure.
Number of Deals - Retail Sector vs. Turkey (2008 –2011) Expected M&A Activity by Sectors in 2012
300 23,7%
264 25,0%
241
250
20,0%
15,1% 14,0%
200 172 15,0% 12,9%
10,8% 9,7%
150 10,0% 8,6%
115
100 5,0% 2,2% 2,2% 1,1%
13 12 0,0%
50 9 7
0
2008 2009 2010 2011
Retail Sector Deals Total Deals in Turkey
Source: Ernst & Young M&A Reports 2008, 2009, 2010 and 2011 Source: Ernst & Young M&A Report 2011
Page 12 Turkish Business Environment & Retail Sector in Turkey

13. Retail Sector
SWOT Analysis
Strengths Opportunities
► Attractive Demographics: population of 74 million with a 1.5% growth ► Organized retail sector is still under-penetrated despite the
rate annually. Average household size of 3.9 people vs. EU average of sector’s higher than market growth and constitutes 44% of the
2.5 grocery retailing vs. 80% in EU
► Strong GDP growth outlook resulting in an increase in purchasing ► Only 20% of cities of Turkey over 1 million population. Other
power cities are growing with the economic expansion which means a
► Grocery consumption are relatively immune to economic downturns huge potential for new organized grocery retail stores in the
country
► Compared to EU countries, a relatively low cost qualified workforce
supports the expansion of the sector ► Increasing number of shopping malls
► With their increasing purchasing power, organized retailers have a ► The government may support organized retailing expansion
lowering effect on inflation
► Strong domestic production in grocery and limited share of imported
goods
Weaknesses Threats
► Fragmentated traditional retailers may attract customers during ► Although the organized retail sector is relatively immune to
economic downturn with the ability to provide late payments and tax- economic downturns, an unforeseen economic crisis may
free shopping slowdown national players’ investment programs and hence new
space additions
► IT infrastructure in logistics is not developed and manual management
affects the efficiency of the sector ► Politic and economic uncertainties in the eastern part of the
country may limit growth prospects in this region
► Price can vary from region to region and players can suffer from
margin pressure ► The draft retail law may bring additional bureaucratic layers to
organized retailers’ new stores with a sales area higher than 400
► Most customers still prefer to purchase unpackaged foods from
sqm in addition to limits on working days as well as operating
groceries and bazaars instead of organized retailers
hours
Page 13 Turkish Business Environment & Retail Sector in Turkey

14. Retail Sector
Shopping Malls
► Turkey has the third highest number of shopping malls in Europe, after Spain and Russia.
► The young population of Turkey (nearly 75 million) attracts the establishment of several department stores and shopping malls with large
foreign investment. In addition, such shopping malls make the process of shopping easier for consumers as they get the opportunity to shop for
lots of items under one roof.
► Increasing competition in the market leads to an increase in brand choice and improvement in brand quality, which inevitably results in growing
demand for the retail products. This in turn attracts a large number of leading retail chains to Turkey.
► The current demand for convenience shopping keeps increasing and the number of shopping malls surges, especially in Istanbul and other
large cities. Retailers are also investing in medium-sized cities by introducing smaller formats to improve market access
► According to Council of Shopping Centers, there is still a big potential for shopping mall development in Turkey due to the fact that there are
currently 49 cities which don’t have any shopping malls.
► While İstanbul is ranked #1 with 102 shopping malls, it is followed by Ankara with 32 shopping malls and İzmir with 17 shopping malls.
► The sector created employment for 350,000 people as of 2011. With the developments until 2015, it’s expected that this number would
increase to 500,000 people.
Number of Shopping Malls Total Leasable Retail Area in the Shopping Malls
400
344 6.500
350 7.000
270 5.700
300 263 6.000 CAGR: 19.4%
236 4.900
CAGR: 21.3% 5.000
Thousands
250 210
200 166 4.000 3.500
133 2.500
150 106 3.000 2.100
81 93 1.700 1.900
100
35 46 53 60 2.000 1.100 1.300 1.400
50 10 12 14 18 25
1.000
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Total Leasable Retail Area (in sqm, per year)
Source: Turkish Council of Shopping Centers and Retailers Source: Turkish Council of Shopping Centers and Retailers
Page 14 Turkish Business Environment & Retail Sector in Turkey

15. Retail Sector
Shopping Malls
Gross Leasable Area per 1,000 capita in Europe
Netherlands
Ireland
Sweden
Luxembourg
Finland
UK
Spain
Portugal
France
Italy
Czech Rep.
Poland
Slovakia
Germany
Hungary
Turkey
Belgium
Russia
Bulgaria
Greece
0 50 100 150 200 250 300 350 400 450
Source: Turkish Council of Shopping Centers and Retailers
Page 15 Turkish Business Environment & Retail Sector in Turkey

16. Food Retail
Sub-Category Overview and Major Players
► Turkey is the 5th largest country in the world in terms of spending on food. The Turkish food industry is enjoying continuous growth trends due to the young population
of the country, high urbanization rates, and rising income levels. The food retail sub-category has also seen robust economic growth in the last years. The sales of
large food retailers have risen and new hyper and supermarkets are continuing to be opened at an incredible rate. Moreover, the discount store concept has been
developing rapidly in Turkey and the number of discount stores have increased rapidly in the recent years.
► As the largest category in the Turkish retail sector, food retail had a market size of US$ 96 billion in 2010 and has grown with a CAGR of 6.3% in the last 5 years.
► The food retail sub-category is classified into two major groups, organized and unorganized retailers. Organized retailers are mostly chain stores that have a corporate
entity and are fully registered. Unorganized retailers, also called the traditional market, constitute smaller, single stores and bazaars. As mentioned before, the market
is evolving in Turkey and the organized modern retailers are gaining more importance in the market.
Major Organized Retailers by Format
Tesco
Migros Bim Carrefoursa Kipa Metro Group Şok A101 Kiler Bizim Toptan
Hypermarket X X X X
Supermarket X X X X
Discount X X X X X
Cash&Carry X X
Source: Analyst Reports
► The hypermarket segment is dominated in Turkey mainly by international retail giants and Segment Breakdown of Food Retail Revenues
there is more room for growth in the segment. The selling space per 1,000 inhabitants
increased from 6 sqm in 2004 to 10 sqm in 2010. However, the penetration is much higher
100,0
in developed countries at 80 sqm.
► Among the four formats, supermarkets are expected to have the slowest growth rate in the 80,0 18,4 17,8
18,2
following years since the supermarket segment is already mature in Turkey and 18,1
supermarkets are small enough to benefit from higher return and penetration prospects. 60,0
TL billion
33,9 33,0
► The discount format is relatively new in Turkey compared to its European peers. With 33,7
40,0 33,3
establishment of BIM in 1995, the discount format started to evolve, and until today, the 8,9 9,9
segment achieved an overall penetration of 11% within the grocery retail market in Turkey. 7,2
20,0 4,9
In order to compete with the growth trend in the discount segment, major retailers are 22,8 25,1 27,6
19,0
changing their strategies and going for concepts such as fast shopping, gourmet and 3,0 4,3 4,4 5,0
0,0
boutique stores.
2006 2007 2008 2009
► The cash & carry segment is quite under-penetrated with organized cash & carry having a
5% market share. The biggest players are Metro Group (German) and Bizim Toptan Hypermarkets Supermarkets Discount Stores Small Groceries Specialist Stores
(Turkish). Source: Analyst Reports
Page 16 Turkish Business Environment & Retail Sector in Turkey

17. Home Retail
Sub-Category Overview and Major Players
► Home retail sub-category is the second largest category in the retail sector in Turkey with a market size of US$ 26.5 billion in 2010.
► The growth in the Turkish home retail market accelerated in the beginning of the 1990s when international players such as Tefal penetrated and
widened the product variety in the market which was formerly dominated by local manufacturers.
► Altering the tastes of Turkish customers and forcing the existing local players to adapt to the new product range, international players also created an
environment where new Turkish competitors emerged.
► Entrance of discount retailers such as Bauhaus and Ikea and their respective growth implied the vast market potential for the household goods retail
industry.
► Today there are several domestic and international players in Turkey each differing from others in terms of their product range and retailing strategy.
► Main players in the home retail market are
► Home improvement product retailers: Koçtaş, Bauhaus, Praktiker, Ikea, Tekzen
► White goods retailers: Arçelik, Vestel
► Medium scale home retailer companies: Esse, Güral Porselen, Kütahya Porselen, Zara Home, Tepe Home, Mudo Concept, Paşabahçe,
Boyner Evde, YKM, Karaca, Tefal, Evkur
► Small scale home retailer companies: Bernardo, Jumbo, Monev, Tantitoni, English Home
Major Drivers of the Home Retail Market Growth
► New Household Additions: New marriages, changes in the Turkish family structure and an increasing number of people living alone, such as students and
single professionals, create a significant growth in the number of Turkish households. As of 2010, there are approximately 19 million households in Turkey
and it is expected to have 2 million new additions within 3 years.
► GDP per Capita and Consumer Spending: In line with the GDP growth, per capita consumer spending level of US$ 6,977 in 2010 is expected to reach US$
12,948 by 2014. Retail expenses constitute 35% of the overall spending and the spending growth is expected to remain at its fast pace.
► Gross Leasable Area in the Shopping Malls: Home retailers tend to locate their stores in shopping centers since the shopping centers have large
catchment areas including the target consumer group of these retailers. Therefore, new shopping centers represent a potential to extend retail business into
new markets.
Page 17 Turkish Business Environment & Retail Sector in Turkey

18. Apparel Retail
Sub-Category Overview and Major Players
► Apparel sector reached a market size of US$ 24.3 billion in 2010, which constituted around 27% of non-food retail market in Turkey.
► This ratio was 22% in 2005 and it is expected to be realize around 33% by 2014.
► In Turkey, demand of apparel retail is forecasted an increase by 11% per annum between 2011 and 2015, with this growth Turkey can be the largest
markets in Europe by the end of this period.
► Top leading apparel and footwear retailers companies are:
► LC Waikiki, Koton,
► Zara, Network
► Mavi Jeans
► Sarar Giyim
► Damat Tween
► İpekyol
► Vakko, Beymen
► The number of outlets increased in mixed retailers considerably in 2010. Local companies such as Boyner and YKM increased the number of
their outlets year-on-year. Expected growth value of sales for mixed retailers is around 18% by 2015.
► Some of the mixed retailers are:
► Boyner
► YKM
► H&M
► C&A
► Another highlight of the apparel retail area is the increasing demand for children apparels. 15% of Turkey’s population is comprised by the
people under the age of 12 and such a young population attracts investors to make investments in children apparels, which managed to grow
by 15% within 2011.
Page 18 Turkish Business Environment & Retail Sector in Turkey

19. E-Commerce Retail
Sub-Category Overview and Major Players
► In Turkey, there are numbers of e-commerce sites that offer services as sale of second-hand goods, real estate, ticket purchases and food delivery.
Fashion, media, jewellery and auto parts are other important product categories for the leading E-Commerce players.
► Sahibinden.com was the leading e-commerce player in Turkey as of September 2011, followed by Gitti Gidiyor. Multi-category retailer
Hepsiburada.com is ranked third, as the company distributed more than 330,000 products in more than 36 categories in 2011.
► Private shopping site Trendyol is also within the Top 10 of the ranking. The website already had 2 million registered users in the beginning of 2011.
► E-Commerce sales in Turkey increased by 52% over the first nine months of 2011 compared with the same period the year before, to stand at TL16.9
billion (more than €8.5 billion).
► The total amount spent on e-commerce sites reached US$ 9.4 billion in 2010 (which was US$ 5.8 billion in 2009) through 96.1 million (67.3 million in
2009) transactions.
► The sector with the biggest online growth is services sector with a total turnover of TL 2.3 billion which is a 69% increase compared with the year
before.
► As of 2011, some of the important M&A transactions:
► A major multimedia player, Naspers, has penetrated the Turkish internet market by acquiring approximately 70% of the shares of Markafoni
► Amazon has acquired a minority stake in Ciceksepeti, which operates an online flower and gifts store in Turkey
► Kleiner Perkins Caufield & Byers and Tiger Global invested between US$ 25 million and US$ 30 million in private shopping site Trendyol
► Swedish investment company Quants Financial Services recently bought a majority stake in Grupfoni.
Page 19 Turkish Business Environment & Retail Sector in Turkey

20. Electronics Retail
Sub-Category Overview and Major Players
► In 2010, the size of the consumer electronics market in Turkey Distribution of Electronics Retail by Segments, 2010
realized US$ 7.3 billion and is expected to increase by more than
52% to US$ 11.1 billion by the end of 2014. The distribution of
consumer electronics by main product segments is presented in the 16,0%
figure on the right.
► The large global consumer electronics vendors prefer to set up local
offices in Turkey due to relevant costs.
► Electronic devices had US$ 8.71 billion demand at the end of 2011, 22,0%
and it is expected to have an increasing demand thanks to the 62,0%
growing popularity of digital lifestyle devices such as LCD TV sets,
notebook computers and digital cameras, as well as rising incomes
and lower prices.
► Digital camera penetration is expected to reach 80% by 2012 and PC Computer hardware related Audio-visual equipment Mobile phones
penetration is projected to reach 33% by 2015 while mobile Source: Business Monitor International
subscriber penetration has reached 80%. In consumer electronics
sector, the main market players are;
► Teknosa
► Bimeks
► Media Markt
► Electro World
► Darty
► Gold Computer
► Vatan Computer
Page 20 Turkish Business Environment & Retail Sector in Turkey

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Page 21 Turkish Business Environment & Retail Sector in Turkey