Turkiye’s Hepsiburada Eyes Ukraine Expansion Despite Ongoing Conflict, Betting on Long-Term Strategy for Growth

One of Turkiye’s biggest e-commerce companies plans to launch operations in Ukraine even as Russia’s invasion nears the two-year mark with no end in sight. aims to start selling goods in Ukraine if a trial run is deemed successful. It’s part of a longer-term strategy for the online group,which is battling to recover from a stock price plunge since floating on the Nasdaq in 2021.

“Ukraine is a difficult but important market for Turkiye,” said chief executive officer Nilhan Onal Gokcetekin, who took over a year ago and pledged to return the Istanbul-based retailer to profitability.

“This is a strategic investment for us. In the future, (Ukraine) will normalize and we want to be ready,” she told Bloomberg News in an interview.

Ukraine already offers an opportunity given the challenges residents there face in sourcing goods domestically or resorting to cross-border shipments with extended delivery times, she added.

While the initial focus is on testing operations in Ukraine, Onal said the company’s long-term strategy hinges on collaborating with local partners. Kosovo and the Middle East are other regions she’s eyeing for potential growth.

Despite a turbulent 2023 for Turkish markets, Hepsiburada posted a 45% surge in third-quarter gross merchandise value when adjusted for inflation, to 25.7 billion liras ($863 million). Ebitda improved from a negative 1.03 billion liras to 87.9 million liras compared to the same quarter a year ago. The company’s shares have started to recover after sinking into penny-stock territory.

Bottomed Out

Hepsiburada, founded in 1998 and known formally as D-MARKET Electronic Services & Trading, went public in the US in mid-2021. It became the first primary Turkish listing on Nasdaq as it rode a global wave of technology and online companies during the pandemic.

Since then, shares have fallen from a peak of $15.23 to as low as 59 cents, and now trade around $1.70. The plunge triggered a lawsuit against company executives, shareholder TurkCommerce and the institutions involved in the offering, but the case was closed with a settlement.

Shares have risen since Onal took over and were up 173% last year, outpacing the Nasdaq Composite’s gain of 43% during the same period. Hepsiburada’s current value is $548 million, down from almost $4 billion at the time of its IPO.

Onal, who previously worked for Amazon Services Europe and Proctor & Gamble, banned internal discussions of stock performance as one of her first actions after taking over.

Onal said Hepsiburada’s customer base alone implies more value than its current share price. The site, which sells goods ranging from cookware and appliances to apparel and plane tickets, has 12 million active users, according to its quarterly report. Analysts have a consensus target price for the company of $2.40 per share.

She also said the company doesn’t need to tap debt markets, as it benefits from rising dollar rates with about $200 million in deposits.

Source: Bloomberg

Image: grizzlysms

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