According to the prime minister's office, the sector’s growth is outpacing GDP growth significantly, with a compound annual growth rate of almost 15 percent over the last decade. The size of the sector, estimated at about $29 billion by Deloitte, is still significantly below the EU average, pointing to a nice upside.
The sector is still dominated by the telecommunications industry in terms of revenue. However, the driver of growth will probably be the result of an offline-to-online migration in multiple sectors, similar to what has been experienced in the United States and the European Union.
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A dramatic characteristic of the Turkish market is how connected it is. The Turkish Investment Agency estimates 50 million Internet users. With 32 million users, Turkey ranks as the seventh country on Facebook. The aggregate attention on digital media is immense.
However, this is in deep contrast to the commercialization of this connected community. My firm estimates the number of people who have ever completed a commercial transaction online in Turkey is around 5 million, a mere 10 percent of the Internet users.
Therefore, one of the key explosions will be in e-commerce. We have started seeing the first signs of this with extreme-growth e-commerce startups like Trendyol, Markafoni and Grupanya, which already have millions of dollars in monthly revenues. Bolstered by a very strong payments system (51 million credit card holders according to the Turkish Interbank Card Center) and an effective logistics infrastructure, the wave of pure online e-commerce companies and e-commerce arms of brick and mortar players are here.
Another key area to grow is digital content. Historically, content has been tough to monetize effectively in Turkey. However, we are starting to see improvements, through micro payment service providers and effective ad networks.
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One sparkling example is Peak Games, a Turkish social gaming company that claims nearly 10 million daily active users, making it the third-largest social gaming platform in the world. The growing Turkish sphere of influence in the region will enable other digital content companies to grow rapidly and play their part in the rising digital economy.
Finally, I should note the most critical underpinning of this bullish outlook: the talent base to drive this growth. Here there are two factors: The strong technical education system of the country, and the reverse brain-drain that has begun shifting top-tier talent back from the U.S. and Europe.