Ben Rooney – Sina Afra Interview

The interview that Ben Rooney made with Sina Afra left its mark on the first night of Etohum “Startup Turkey” camp.

During the first night of Etohum which brings together Turkey’s best entrepreneurs with the world’s most experienced investors and which included 12 ventures from the Middle East and the North Africa (MENA) region for the first time this year, Wall Street Journal technology editor Ben Rooney conducted an interview with Markafoni Chairman of the Board Sina Afra. During the interview attended by Startup Turkey camp participators, Afra answered the questions of Rooney on topics such as e-commerce, mobile commerce, future retail trends, e-commerce applications in different markets. 

The widely anticipated Startup Turkey camp of Etohum which was established to create a marketplace for entrepreneurs and investors in order to create and develop an internet ecosystem in Turkey was host to a fine interview on its first night. During the interactive interview watched by the camp participants, Ben Rooney sometimes asked questions to the viewers in order to get the opinions of new entrepreneurs on topics such as e-commerce and mobile commerce models. Are many companies in Turkey after a very limited target group? Ben Rooney’s first question was on the target groups of the e-commerce players in Turkey and the size of these target groups. Afra’s response to this question was as follows: “ The most successful venture models in Turkey were generally among e-commerce ventures and there is still potential in this sector in our country. Even though the most successful ventures are again e-commerce ventures when we look at this issue from the point of view of entrepreneurship, I believe that next year there will be non e-commerce ventures in the Startup as well.” Afra also mentioned the hardships that e-commerce faces in Turkey and continued as follows: “The weak financial structure in Turkey is among the first obstacles that e-commerce sector faces. The second is that risk capital is very low. Retail sector gets much less support than is required to make the transition to the online structure. The world started e-commerce in 2001 but we can say that our country is just starting. We need at least half a generation to reach the level of the other countries. If there is no investment when the population of the country is young and credit card usage potential is high then there is a problem here! Afra’s response to Rooney’s question on why the potential of Turkey cannot be used properly was as follows: “When we look at the 10 year history of the Turkish consumer we see that there has not been an eBay that sold products to this consumer. Therefore our consumption habits did not adapt to the electronic medium. The investment in the sector is based on local capital. And the financial structure of the Turkish internet companies is weak when compared with the rest of the world. Therefore we are years behind other countries.” If Markafoni was founded today, would it be focused on mobile commerce or on e-commerce as it was when it first launched? Chairman of the Board Sina Afra’s response to Ben Rooney was as follows: “If Markafoni was founded today it would again start with a focus on e-commerce. This brand was launched in September 2008 and became the first company launching its mobile application in its sector in the world in December of the same year. Very small increases such as 0.2 percent and 0.3 percent were seen in mobile sales during  2009 and 2010. Whereas the current ratio of our mobile sales is 12 percent. So as can be understood, our main cash flow was always greater in e-commerce in comparison to mobile.” New entrepreneurs should give importance to e-commerce without missing the mobile commerce opportunity! Afra’s response to Rooney’s question on his suggestions to young e-commerce entrepreneurs was as follows: “The most important difference of mobile commerce from e-commerce is that it is everywhere anytime. For e-commerce you should have your PC with you but for mobile our tablets and smart phones are enough and this makes mobile a wonderful channel. You can attract the attention of the consumer by sending them an e-mail during 19:00 – 20:00 when they check their personal e-mails and these are already people who spend their whole day in front of the computer. However, you can reach people who are going home from work, watching TV or spending time with their families and friends via tablets or smart phones. In addition, you should provide a perfect infrastructure in mobile.” Will standard shopping at real stores be over? Rooney reminded that there are opposing views regarding the future of commerce and asked Afra how he views the claims that “e-commerce will be the end of shopping at real stores” and if there are sectors which are not suited to e-commerce or not. Afra’s statements were as follows: “I think that classic commerce will always continue. In the past there were only small shops and then Shopping Malls came and after that catalogue and TV sales started. E-commerce came after all of these as the only virtual commerce method. All of these classic channels are still continuing and they don’t seem to be abandoning their spots to e-commerce. Parallel worlds to commerce will of course always continue. When we look at the historical ordering, e-commerce ate up some of the classic commerce and now mobile commerce is after e-commerce. But there is still a wide range of consumers that do not want to shop without physical contact. Moreover, some stores gained their success by the ambience that they provide. In e-commerce or mobile commerce you cannot provide people with feelings they have when they enter a real store. Or no one will order a perfume online the scent of which they do not know. There are such points which will never lose to e-commerce or mobile commerce both in terms of product and sector. Even though e-commerce provides us with comfortable shopping experience and low costs, the number of consumers who will not purchase a t-shirt without touching it is not low and you can never provide this in the virtual environment. Satisfaction is told to one person whereas complaints are told to ten people! When Rooney asked what his secrets were in creating a company such as Markafoni which shone through all the other e-commerce sites, Sina Afra said, “You have to give what you promise. Even though the consumer finds many price alternatives online, they won’t shop from a company which they don’t trust in order to pay 50 cents less. If we tell them that we are delivering the product tomorrow then we have to do it because the most important thing for us is to keep our promises. In addition we have 7-24 phone support for our customers. Our only contact point with customers is over the phone and what we have to do after keeping our promises is to present the customer a quality communication from a single and correct point.” In Russia the person who delivers the product waits at your door until he/she is certain that you like that product. Ben Rooney asked about the different tendencies of e-commerce and mobile commerce consumers in different markets and Sina Afra’s response was: “In Turkey we speak the same language with our partners who distribute our products and we receive a service the quality of which we determine, we can also follow the product with just one SMS and the consumers use credit card more than paying at the door. However in Russia the distribution services are unfortunately lacking. Carrying out your own operation is less costly than a third party. Since the delivery team is ours we wait at the door of the customer until we make certain that they like it and will not return it. In addition Russian consumers like paying at the door and this has become their habit.” You can visit http://startupturkey.com/ to get more information on Etohum “Startup Turkey” Entrepreneurship Camp. Umut Ersoy Marjinal Porter Novelli