Alibaba Plans $1 Billion Plus Investment in Turkey

Alibaba plans to invest more than $1 billion in Turkey. Credit: Perryfeng2626 / Wikimedia Commons CC BY-SA 4.0

Alibaba Group Holding LTD. is planning to invest more than $1 billion in Turkey. The news became public knowledge after the company’s president, Michael Evans, told the Turkish newspaper Sabah about Alibaba’s investment plans in Turkey.

It was revealed that Alibaba has plans to upscale its export and logistics operations from within Turkey. The Chinese firm chose Turkey because of its close proximity to export markets in Europe and the Middle East.

So far, the company has outlined its intentions to establish a logistics hub at Istanbul Airport and a data center near the Turkish capital of Ankara.

Alibaba’s investment in Turkey

“We have a serious investment plan at Istanbul Airport,” Evans is reported to have told Sabah. “We can evaluate e-export plans from here to Europe, the Middle East and the Far East. We plan an investment of more than $1 billion.”

According to the Turkish newspaper, Turkey was chosen for its strong production capabilities. “There is a great production power in Türkiye, which is the most advantageous country in the world in this sense,” Evans said.

“Countries with high technology infrastructure and production power will come to the fore,” the Alibaba president continued. “Since we see that Turkey is very strong in these two areas, it will definitely be advantageous in the G-20.”

Turkey’s convenient geographical position between Europe and the Middle East was another motivating factor. Evans commented that Alibaba “will carry Turkey’s production power and export potential to Europe and the Middle East.”

The company has plans to build a logistics hub at Istanbul Airport and a data center near Ankara, the capital of Turkey. The proposed data center will be built in the district of Temelli and is set to be the country’s biggest.

Yeni Havalimani, Istanbul Airport, Turkey. Credit: Kulttuurinavigaattori / Wikimedia Commons CC BY-SA 4.0

Alibaba backs Trendyol

Alibaba has already invested significant amounts in Turkey. Last year, the Chinese firm upped its stake in Trendyol, a Turkish e-commerce platform, to 86.5 percent. The investment amounted to $330 million (€273 million).

“The reason we chose Trendyol was that its technology was advanced, and its potential was great,” Evans said. “We are positioning this place as a base for Europe and the Middle East.”

The company has grown immensely and is the highest-ranked online fashion retailer in Turkey. Trendyol’s sales account for between 30 and 35 percent of all e-commerce net sales in the fashion category.

Trendyol was founded in 2010 and is based in Istanbul. The company is privately held although there has been some speculation that it could go public. Caglayan Cetin, president of the Trendyol group, dispelled these rumors.

Cetin, who spoke to Sabah during the same interview with Alibaba President Evans, told the newspaper that Trendyol has no immediate plans to go public. “We don’t have such a plan in the short term,” he said. “If we achieve growth targets we want in a short time, then it may be possible within a 3- to 5-year window.”

For Alibaba, Trendyol is a useful access point to Turkey’s stock market. It is likely that the firm will continue to invest heavily in Turkey in the coming years.