Turkey’s e-commerce platform Hepsiburada (Nasdaq/HEPS) on January 7 hit the headlines with some talk about entering the Ukraine market. CEO Nilhan Onal Gokcetekin gave an interview to Bloomberg and reportedly disclosed the Ukraine plan.

Bloomberg also noted that the Hepsiburada share price was up 173% y/y. The company’s shares have started to recover since sinking into penny-stock territory, it said.

(The movie The Wolf of Wall Street is a good watch for explanations of how penny-stocks and initial public offerings (IPOs) sometimes work.)

Hepsiburada, formally D-Market Electronics Services, intends to play the long game in Ukraine, Bloomberg also reported, adding that Kosovo and the Middle East were other destinations Gokcetekin was eyeing for potential growth.

Gokcetekin was also cited as saying that she has banned discussions of the company’s share price performance within company quarters.

As regards Hepsiburada’s financials, the so-called gross merchandise value (GMV) figures, namely the combined sales volume generated by the sellers on the platform, are in circulation, while Bloomberg also noted that across a year the company’s Ebitda improved from a negative Turkish lira (TRY) 1bn to a positive TRY 88mn in in 3Q23.

In 2000, Hanzade Dogan Boyner, who was working at internet group Dogan Online (a unit of Dogan Holding (DOHOL)), purchased a small online computer seller called Infoshop and renamed it Hepsiburada, which in Turkish means “Everything is here.”

Boyner has served as the company’s chair ever since. She quit Dogan Holding, owned by her father Aydin Dogan, in 2008.

Hepsiburada began by selling electronics, but morphed into selling everything from cosmetics and home decor to garden appliances and pet toys.

In 2008, Boyner ranked number 1,062 on the Forbes list of the world’s billionaires, with an estimated net worth of $1bn. Her wealth was due to her stake in her family's holdings, but that dropped below the nine-zero threshold, pushing her off the list the following year.

Boyner’s father, Aydin Dogan, is also a billionaire. An ex-media mogul, he built his fortune from the media industry. He was pushed by the Turkish government to sell his media holding in 2018.

Boyner has a 21.5% stake in Hepsiburada, while she holds 71% of the company’s voting power. Her husband Osman Boyner’s family is also among Turkey’s wealthiest families.

In June 2021, Hepsiburada sold a 20% stake in an IPO for a consideration of $728mn amid the COVID-19 global liquidity boom. The share price stood at $12, valuing the enterprise at $4bn.

JPMorgan (New York/JPM), Bank of America Merrill Lynch (BofA Securities Inc, a unit of Bank of America (New York/BAC)), Goldman Sachs (New York/GS), Morgan Stanley (New York/MS) and UBS (Zurich/UBSG) Securities acted as intermediaries.

On July 2, 2021, Hepsiburada shares were opened to trading on the market. On July 7, the share price saw $15.23. 

In August 2021, after Hepsiburada released its financials, a freefall began. In July 2022, the price saw $0.59.

Turkey's Dogan family controls a 65.4% stake in the company and TurkCommerce B.V. controls 14.6%.

TurkCommerce is majority-owned by an investment fund managed by US asset manager Franklin Templeton (New York/BEN). The European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC) also have stakes in Hepsiburada via TurkCommerce, but they have not released exact figures on their holdings.

Following the IPO, Hanzade Dogan Boyner became a billionaire again, but, once again, her status did not last.

Hepsiburada has always been a lossmaking enterprise and it does not anticipate paying dividends.

In 2022, the company agreed to pay a total of $14mn in compensation to investors who filed two lawsuits against the company, its board members and senior management, the underwriters of its IPO and the selling shareholder TurkCommerce.

The Turkish e-commerce market has its origins in the 1990s. In 2022, the market grew to TRY801bn ($43bn) from TRY382bn ($29bn). The size of e-commerce corresponded to 6% of the country’s GDP in 2022, up from 5.7% in 2021.

In the country's currently fragmented e-commerce market, Trendyol, launched in 2010 and serving as the Turkish unit of China's Alibaba (New York/BABA; Hong Kong/9988) since 2018, is the market leader with a market share standing at about 30%.

Hepsiburada reported a GMV of TRY 54bn, representing a 7% share in Turkey’s combined retail e-commerce volume (down from 9% in 2021).

In 3Q23, Hepsiburada had 12mn active customers, representing no change from a year ago, and around 94,000 active merchants.

n11 (formally Dogus Planet), a JV of Getir, Dogus Holding and SK Group (Seoul/034730), has a market share of around 8%.

In July 2022, eBay (Nasdaq/EBAY) shut down its Turkish unit GittiGidiyor. It was launched in 2001, served as eBay's Turkish unit from 2011 and accounted for a market share of around 4%.

Amazon (Nasdaq/AMZN) entered the Turkish market in 2018 and remains a relatively small player, compared to rivals. Morhipo, founded in 2011 by Boyner Group, has a similar status.

So far, Turkey has two decacorns, namely Alibaba’s Trendyol and Getir (a rapid groceries delivery app) along with five unicorns, namely Peak Games (acquired by Zynga (Nasdaq/ZNGA)), another games developer Dream Games, Hepsiburada, artificial intelligence (AI)-based martech (marketing platform) Insider Growth Management Platform and Istanbul-based fintech Papara.

Of the enterprises, only Hepsiburada is a listed company. Its market value currently stands at around $500-600mn. That suggests that it is not a unicorn anymore.