AV Magazine
The pro AV channel in Turkey desires the same high quality products and high levels of service of any of Europe’s top markets
It may not have been highlighted as a member of the BRIC group of emerging economies but Turkey has crept under the radar to become of the most exciting and rapidly growing markets in the world. President Recep Tayyip Erdogan wants to catapult the country into the top ten of the global economic elite by 2023, the hundreth anniversary of the foundation of the Republic. His ambition may ultimately arrive a decade late but the thrust of his rhetoric is far from idle.
Turkey is forecast to be the second fastest growing country in the world by 2018, according to the OECD, and bank HSBC reckons it will be the world’s twelfth, and Europe’s fourth, biggest economy by 2050 set to out-strip Italy and Spain in the next decade. Hindering this progress is its current position outside the EU. Accession talks are continuing and are said to be key to the country’s modernisation and business environment.
“For countries that are members of the EU, goods can be transported without any customs regulations but Turkey does not fall under this category,” notes Laila Hede Jensen, v-p sales Europe, SiliconCore. “The market is very sensitive and easily affected by decisions that are made on a much wider political scale. Last year, Turkey went through its first presidential elections which were a big step for the economy. This, combined with the upcoming state party election in June has created some uncertainty in the market which has slowed down external investment.”
Highly variable exchange rates makes it hard to predict margins and challenging to prepare forecasts. “You have to track the economy daily and adapt very quickly,” says Görkem Çelikbilek, ceo of local integrator Asimetrik which is also a distributor for brands including Powersoft and Meyer Sound.
“This is how you see significant ups and downs in the sales numbers when compared to the UK or Germany and when you make an annual evaluation. Your margins always change.”
Improvement in Turkey’s infrastructure is seen as crucial in maintaining strong growth. A vast new airport is being built to the north of Istanbul costing €22bn. Elsewhere, a €2.6bn bridge is being constructed across the Bosphorus strait, while the Galata region is getting a brand new port complex worth around €616m. Many of Turkey’s military zones will be redeveloped to cater for the country’s rapidly growing population, currently at 74 million. The government plans to inject €3bn into the domestic hi-tech industry. The aim is to reduce the imports of smartphones, tablets, computers, fibre-optics and household electronic devices and manufacture them locally.
A pivotal position
The country’s strategic location at the junction between Europe, the Levant and central Asia remains pivotal for companies looking for a bridge into and out of those regions.
“In recent years, there has been an influx of industry exhibitions taking place in Istanbul and in other major business cities, new products launching on to the market from major manufacturers and a rise in jobs within the technology sector,” reports Jensen.
While conflict-torn Syria is on Turkey’s doorstep to the south, it also neighbours Azerbaijan and Turkmenistan which benefit from Turkey’s considerable construction industry.
“The domestic markets of these countries are weak and there is pretty much no retail market, when compared to Turkey,” says Çelikbilek. “Most of the concentration is installation, which is subcontracted by the governments of these countries.”
Companies wanting a piece of the action at oil rich Azerbaijan are pitching their HQs in Istanbul. The European Games arrives in the capital Baku this month (June) after being given the go-ahead by the European Olympic Committee barely two and half years ago. This led to a construction scramble into which the Azerbaijan government pumped €8.7bn to prepare 18 competition venues, including a new 65,000 seat national stadium which will also host four matches at Euro 2020 (and for which Asimetrik designed and integrated the sound systems).
Early adopters
Stadium installations in Turkey itself have been abundant in recent times with Asimetrik a central contractor at the Galatasaray TT Arena and the remarkable new Timsah Arena the AV for which it engineered, simulated and installed. The home of Turkish side Bursaspor, known as the Green Crocodiles, features a giant croc wrapped around the entire building with eyes that light up for night games.
Another key market vertical in Turkey is the education sector. Since 2006, 61 private universities have opened nationwide with expansion still continuing. Istanbul and Ankara are already among the leading world cities in terms of GDP, populated by a growing middle class which expects the same level of mobility, consumption habits, social life and urban development as Germany.
“Istanbul is one of the earliest market adopters for AV technology, with an increasingly aspirational population, and one of the major business areas in Turkey,” confirms Jensen. “Today in the city there are 112 shopping malls but this number is set to increase dramatically.”
“High-end restaurants, gyms, shops, clubs are the new fashion,” says Çelikbilek of Istanbul. “We are enhancing the experience Istanbul is having when dining, working out or doing any other daily activities. We have many chain brand groups in catering et cetera, and they do not compromise in quality.”
Tourism is big business on the coast where the hotel construction and refurb trade attracts the attention of sound system, lighting design and digital signage vendors.
“Along the Mediterranean there is a large hospitality piece to the economy whereas in Ankara and Istanbul the focus is more on government related activity,” says Colin Farquhar, ceo, Exterity. “In our experience working with top SIs (Exterity’s Turkish partner is Atempo) they provide a very broad range of AV systems and the quality is fantastic. You can’t fault the quality of skill available in the region.”
“The business opportunities in Turkey are not too much different when compared to other countries,” says Çelikbilek. “However, competition between distributors or integrators is much more intense. We have a certain lack of integrators in Turkey which led us to the role of being a system integrator ourselves. As a result, we are on the streets chasing clients, in addition to supporting the existing integrators and dealers.
Local partners
“It is quite obvious that end users need more training, education and expertise. The know-how of the end client affects us in terms of describing our systems and technology to them, and sometimes they end up getting the wrong solution, which they usually replace a few years later.”
As with any market, new entrants are advised to find a locally established partner, in part because as Jensen warns, payment terms can be anything from 60 days through to two years. “Working in the Turkish currency can be a risk for a none native supplier which a local partner can minimise,” she says.
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