New trends in devices Bilkom, one of the leading technology distribution companies in Turkey…
Fikret Ballıkaya, the company’s general manager, assesses the technology retail market shaped by the pandemic and underlines remarkable trends…
During the pandemic period, many companies in Turkey have grown much faster than expected, including technology companies due to the nature of their business. As underlined by Fikret Ballıkaya, General Manager of Bilkom, which is one of the major players in this field, “Bilkom is among the companies which have had their share of the rapid growth owing to the pandemic”.
This is manifested by an average of 35% growth in the last 2 years and a turnover of TRY 5-4 billion ($630 million) generated by the end of 2021. The sales of phone, computer and tablet have had a great impact on reaching to these figures.
Approximately 600 thousand phones, 100 thousand computers, about 250 thousand tablets and a little more than 250 thousand smart watches were sold. In other word, more than 1.6 million devices were purchased within a year.
According to Fikret Ballıkaya, one of the developments that marked the last 2 years was the growth in the share of e-commerce. Already 20 percent, the increase of this share is expected to continue.
Another major development of 2021 was the launch of “domestic production” at Bilkom.
A “global expansion” target has been set for 2022. Ballıkaya says, “It is important for us to use Turkey as a production hub and sell our products abroad. Then maybe we can make direct investments in other countries”
Other evaluations of Fikret Ballıkaya about the sector are as follows:
TECHNOLOGY CONSUMPTION HAS CHANGED
Our professional-private life conditions have changed dramatically due to the effect of the pandemic. Online was a part of our life, but it was not such a major component. However, in this process, we have overcome hesitations and specific cultural barriers/thresholds. Use of digital tools have become routine for great many people. They have realized the benefits of online shopping/commerce. Digital tools have become an indispensable element now.
There is also a major change in technology retail. During this period, our existing strength has become even stronger, giving us the opportunity to provide a better online and retail experience.
With the effect of the pandemic, e-commerce in Turkey has grown immensely. While the total business volume was in the range of 120-130 billion in 2019, it has now reached to 380-400 billion. In other words, it has increased more than 3 times and will continue to grow. Technology retail is also getting its fair share in this process. We also observe a similar experience across the world. But the world experienced the transition period of 20-30 percent of total trade volumes to online long before us. During ‘Black Friday’ and similar periods, we would test this for short-term from time to time and in fact work on how to make it more sustainable with subsequent service investments.
COMEBACK OF PC AND TABLET
In recent years, there were two segments with dormant or even declining sales: computers and tablets. The computer segment had reached maturity and was replaced by mobile devices. The ‘gaming’ computers and devices with the ‘workstations’ and higher technology, which traditionally have a significant impact on sales, had limited contribution to the overall market growth in their respective niches.
Tablet sales have matured after more than 10 years of activity and have largely completed their penetration, and thus they were also in a decreasing trend. However, thanks to the pandemic, the trend has reversed in these two segments. Tablet sales in Turkey had been under 2 million for a very long time, falling to 1.3-1.4 million units. It reached over 2 million, performing in the range of 2.3 – 2.4 million units again.
Computer sales, which were once 3 million units, fell below 1.5 million units. With a rapid rise, it increased by 50 to 60 percent annually to 2.4 million units, similar to tablets. Our expectation for 2022 is that tablet sales will drop by 10 to 15 percent. There is a strong effect of the “gaming” computers. Despite that, by the end of 2022, sales will either maintain the same level or decline by about 5 percent.
PRODUCTS WITH STABLE STATUS
For phones, we have not observed the activity we see on computers or tablets. In fact, phone segment has completed its ownership rate and reached maturity in the technological development years ago and the sales have been slightly declining in Turkey. There was no decrease in this period, but the market stopped at around 10 million units.
There was also a similar trend globally. However, sales have somewhat soared with the impetus of 5G. Those which had realized the 5G transformation experienced a significant increase in their sales. Right now, nearly 70 percent of the products we sell are 5G supported. The picture has not change in the television segment either. Although media consumption has increased, it continued with annual sales of around 2.2 – 2.3 million televisions for Turkey.
THE MOST ATTRACTIVE SEGMENTS
The 2 most attractive devices with the highest increase in sales were smart watches and wearable smart technologies. These products have become smart platforms. Despite their small size, they offer a much enjoyable experience.
In the last 3 years, this segment has grown more than 3 times. At Bilkom, smart watch sales have caught up with tablet sales, and we are the market leader in both products. We supply 1 out of every 5 smartphones and tablets sold in the electronic retail industry, and also 1 out of every 4 smartwatches sold across Turkey.
Here, we expect that the market will reach about 1 million units in Turkey, especially in 2022. More than 500 thousand products were sold last year. Nearly 600 thousand products were sold across Turkey, and I can say that it is a very dynamic area.
RISING INTEREST IN SMART HOMES
Another rising segment is the robot vacuums, which are part of smart homes.
Our innovation focuses include smart homes and anything about smart homes. We kicked off with smart TVs, continue with robot vacuums, and now it is time for air purifiers. Air conditioning solutions will be coming soon.
The robot vacuum sales figures have reached to amazing levels. Before 2019, the market was about 100 thousand units. As of last year, the Turkish robot vacuum cleaner market is nearly 1 million units. We are talking about 10-fold growth.
Our expectation for this year is that it will reach to 1.5 million units, because we are just at the very beginning of penetration. Given that there are around 20 million households in Turkey, there is a serious market in this segment.
FUTURE WINNERS & LOSERS
WEARABLE AND SMART
For personal use, the wearable and lighter products which need less charging and can create an integrated synergy with you and smart homes will be winners.
NON-SMART WILL LOSE
The non-smart devices will no longer be a part of our lives. There will be no room for devices that are not ‘connected ‘ . You will no longer want to see your old earphones.
OUR INVESTMENT AREAS
Today, we make 35 percent of our investments in technology and innovation, robotic automation and online platforms.
We started with smart televisions, and continue with robot vacuum cleaners and air purifiers. Our new brand is coming soon, where we will offer our IoT connected devices for smart homes .
Lonca Market is our indoor marketplace project where companies can sell their products to other companies. We continue to expand this site.
We also have a ‘virtual workplace ‘ project. We have created an office environment for ourselves independent of time and space . We have continued all our works in a completely virtual environment without any interruption.
LATEST ON THE ELECTRONIC DEVICES MARKET
The 2021 year-end sales of 5 major products:
Tablet: 2.3 million,
PC: 2.4 million,
Phone: 10 million,
Smart watch: 600 thousand, robot vacuum 1 million
ECONOMIC LIFE IS LONGER
6-8 months: In the past, we used to replace the devices such as phones in 6-8 months. They used to be replaced with more fashionable items.
2 YEARS: The end result of the price increases has extended the “economic life” of the products. Now we can talk about a period of about 2 years.