Yemeksepeti.com is the poster child for Turkey’s nascent e-commerce sector. Part of the first wave of internet entrepreneurship in the country, this online food ordering business led to the largest-ever acquisition in Turkey’s internet sector and is set for an IPO next year.
Like many entrepreneurs, Nevzat Aydin, the founder and CEO of Yemeksepeti, drew his inspiration from the time he spent getting an MBA in the US, and shared his idea with his friends after returning to Turkey in 2000 after graduating from the University of San Francisco.
Aydin and his friends looked into whether there was demand from Turkish restaurants and customers for the same sort of online food ordering businesses found in the US. “Following the research, we identified the presence of such a need, commenced the establishment process and adapted the American way of online food delivery to Turkish users and restaurants that would perfectly fit the conditions here,” Aydin tells bne IntelliNews in an interview.
Aydin remembers at the time Yemeksepeti began operating, “food delivery via phone was pretty common, but computer ownership was very low and the internet was definitely not a part of our daily lives. Most of the restaurants were not connected to the internet and we sometimes had to send the orders we received via emails to them manually via fax.”
However, the most challenging part was to convince local restaurants about the potential for this new business model. “Most of the restaurants were not able to predict that the online food delivery sector would become this popular,” he says. “When we finally took well-known brands on board, we started to gain other restaurants’ trust.”
The company’s growth has been in direct correlation with changing consumer trends in Turkey, as well as the increases in internet penetration, computer ownership and smartphone usage in Turkey. The number of mobile phone subscribers in Turkey has reached nearly 72mn out of a population of 78mn, while internet penetration in the country is about 49%.
Beginning with just three people, the Istanbul-based Yemeksepeti now employs 411 employees and operates in 63 cities throughout the country. With more than 4.3mn registered users ordering food from more than 10,000 restaurants in its network, the company receives an average of 110,000 orders per day and shows strong annual revenue growth of above 50%. “When we started our business in 2001, we used to receive 100 orders a day. This number rose slowly but consistently, and we reached 1,000 orders a day in 2004, 5,000 in 2006 and 10,000 in 2008. In 2012, Yemeksepeti was already receiving 50,000 orders a day,” Aydin said.
Such stellar growth didn’t go unnoticed. In 2008 European Founders Fund bought a minority stake in Yemeksepeti, and four years later another private equity fund General Atlantic also acquired a minority stake for a total investment of $44mn.
As a first move into Turkey, the Berlin-based online food-ordering giant Delivery Hero acquired Yemeksepeti in May for $589mn in cash and shares – the largest e-commerce investment to date. Other such acquisitions include Gittigidiyor, which was bought by eBay for $217mn in April 2011, and mobile enterprise developer Pozitron, which was acquired by Monetise for $100mn in February 2014.
Delivery Hero CEO Niklas Ostberg says they are planning an IPO of Yemeksepeti in 2016. This should provide funds for the company’s continued growth both inside and outside the domestic market. Yemeksepeti operates across the region, in Greece with clickdelivery.gr, ifood.jo in Jordan, and in the Middle East where its Foodonclick.com and ifood.jo platforms provide food ordering services in the United Arab Emirates, Saudi Arabia, Lebanon, Oman, Qatar and Jordan. “The overseas business of Yemeksepeti, which provides tremendous growth potential, has further extended Delivery Hero’s position as the global market leader,” Aydin says.
The development of the company has also increased the expectations of Turkish online users and the quality of the member restaurants themselves. “The essence of our job is to add value to people’s lives and we keep that in mind in whatever we do,” Aydin says.
For this reason, Yemeksepeti continues to develop its infrastructure to make ordering food online easier, faster and a more pleasant experience. Along with user-friendly website and mobile applications, there are now a variety of payment options and improved customer relations via call centres.
Yemeksepeti supports not only global brands but also local restaurants; its operational and marketing know-how enables them to access a much broader audience and grow their businesses faster than their local competitors. The restaurants sustain their place in this network on the basis of customer satisfaction with a scoring system that enables users to assess their quality and let the other users to know the quality of the restaurants they wish to order from. “Our call centres receive hundreds of calls every day. If we see that a specific restaurant’s operation is below our quality standards, we advise them to improve it. If a restaurant continues to perform at a low quality, we can terminate our agreement,” Aydin says.
In keeping with the US culture of startups, Aydin is known for his generosity towards his employees. After the acquisition by Delivery Hero, he shared $27mn among 114 employees, with an average bonus of $237,000 paid to each. “If there is a success, we have accomplished it together,” he says.