Is there room for new ones?

In fact, last year two foreign banks, the Russian Sberbank and the Kuwaiti Burgan Bank, entered the sector.
The US Amgen entered the pharmaceutical sector, where there are already a lot of players. Cigna, one of the largest health and life insurance companies in the US, entered the sector in Turkey in 2012. In brief, it is not only in the new sectors in Turkey, new players are also entering traditional sectors. There is talk of new names preparing to enter various sectors. An extensive survey by Capital reveals these developments.

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Turkey,  is one of the countries in which new players have entered several areas. In the last few years, from pharmaceuticals to clothing, foodstuffs and technology, new foreign and domestic players have taken their place in the Turkish market, which does not lose its appetite for growth. Experts say that the reason that space may still open up for new players in several sectors in Turkey is its “open structure”. In the last few years, as many countries around the world have been severely damaged by the crisis, Turkey has retained its economic stability and this has become the reason why foreign companies in particular see the country as a new growth market. When we look at the situation on a sectoral basis, we see that the banking, insurance, clothing, information technology, electrical household appliances and logistics sectors come to the fore as the areas which have space for new players.

WHERE IS AN ENTRY POSSIBLE?
Coming to which areas of different sectors have space for a new player... This varies according to the sector, In logistics, the potential for growth for new players is mostly in railroads and maritime transportation.

In household electrical appliances, the electric vacuum cleaners, irons and personal care categories look like the ones that it would be easiest for new players to enter, Serhan Akin, the board chair of Arnica, which has been one of the fastest growing players in the sector in recent years, explains why, ina sector in which 172 brands have a presence with 5,000 different models, there can still be new entries in these categories: “In Turkey, 600,000 people get married every year. These homes create a need for electrical household appliances. Our sector is continually growing. As a result, our ranks are continuously being swelled by new players.” It is said that in insurance there could be a new area in political risk insurance. In banking it looks as if participation banking is ready for development. Feyzullah Eğriboyun, the deputy general manager of Bank Asya, which is one of the largest players in this field, states that the amount of organic growth is dependent on the entry of new capital.~

IS IT EASY TO TAKE MARKET SHARE?
Each sector and category offers something different for successful new entries. Sectoral specialists say that, with the right strategy and a strong capital base, it is possible to acquire a market share of approximately 1-2 percent within a five year period.

In banking, this share may reach 3-4 percent within the same time period. Bank Asya Deputy General Manager Feyzullah Eğriboyun notes that a player which makes a successful entry can easily achieve this figure, and adds: “This entrant will need to focus in particular on the corporate segment and customers with large-scale transactions. Because retail banking is more of a long-term thing, requiring a branch network, awareness, brand and established confidence.” In the leasing sector, the market share that can be acquired within the first five years is 2-3 percent. In clothing, it is possible to secure a share of 1-2 percent within 1-2 years. Çift Geyik Karaca CEO Cüneyt Güneş says: “There is a great need for a local player in women’s and children’s clothing in particular. A player who enters this area could make significant progress within a very short time.”

WHAT SHOULD NEW PLAYERS LOOK OUT FOR?
When we look at the sectors that are open to new players, it is striking that in fact these sectors have not fully reached saturation point in terms of growth. Another common characteristic of the sectors which can accommodate a new player is the demand for one which can bring a new dimension to competition through innovative business models. Executives at LCWaikiki and ipekyolu, which are both successful players in clothing, highlight this point. Executives at these companies note that in the future it will be new players which have more innovative business models which will be able to take market share.

In recent years, many players have entered e-commerce and there is a need for innovative players who can establish a longterm presence in an increasingly crowded sector. Hakan Orhun the board chair of the Association of Turkish Internet Retailers (ETiD), notes that innovation is very important in the sector. “For this reason, the sector would give a warm welcome to a number of players who enter with innovative business models rather than those which are replicas of existing ones.”

THOSE WHICH ARE SATURATED
In some sectors there is no room for any new entrants. These sectors include automotives, white goods, air transportation, technology retailing, pharmaceuticals, private pensions, furniture, timber products and some foodstuffs categories, such as pasta...

The reason that there is no room for any new players in these sectors is that the large number of existing players means that these markets are the scene of intensive, destructive competition. The players in the sector confirm this view. In the white goods sector, in addition to the six major white goods producers who account for 90-95 percent of the domestic market, there are over 50 medium-sized manufacturers and approximately 500 and spares and parts manufacturers. TURKBESD President Ozcan Aydilek says: “The current players meet all of the sector’s and consumer’s needs. ”