Union of Chambers and Commodity Exchanges of Turkey

TOBB President M. Rifat Hisarcıklıoğlu pointed out that a difficult year was behind them in his speech and reminded that the rise in exchange rates, interest rates and inflation slowed the economy visibly. As a result of the decline in both real sector and household confidence indices, consumption and investment expenditures were cut and retail trade volume decreased continuously for the last 7 months.

Hisarcıklıoğlu pointed out that in the last quarter of last year, in real terms, there was a decline of 2%, while in the first 2 months of this year a decline of 6% was observed. In order to overcome this difficult process, “As the government has reported, we have been in an economic recession for the last 2 quarters. As TOBB, we have been in constant consultation with you and our government in order to overcome this situation. Here, we paid special attention to your views. Retail means domestic consumption. 60% of the economy. The sector is the locomotive and the leading indicator of the economy.”

- We're looking for solutions together

The TOBB President stated that the best sector to understand the state of the market is the retail sector,” As this is the case, we relay your problems to the relevant offices of the government. One of the most important issues for us is employment. As you are the leading sector in employment, you provide the most registered employment. In this context, we have taken important steps in consultation with our government and are working together. Legislation has been changed regarding the short-work allowance. That means; we can maintain employment even if things slow down. Salaries are paid from the Unemployment Fund for 3 months. So far, around 800 companies benefited from this for 72,000 employees. The employer's Minimum Wage Support ended in October last year. Upon request, it was restarted, with the amount raised from 100 TRY to 150 TRY. President Recep Tayyip Erdoğan then asked us to launch a new employment campaign. So, on February 25^th, we began the Employment Mobilization 2019 with the slogan of ‘This is Turkey; There is Business Here!’. Then we met again with our government. We have ensured supports rewarding employment. In every new employment to be made until April 30^th, salary-tax-premium is paid by the government for 3 months. After that, we do not pay taxes and premiums for at least 9 months. So, for every 1 additional employment you provide, there is support amounting to approximately 20,000 TRY per annum. You can find detailed information about these on the TOBB website or at our Chambers.”

Touching on another problematic issue, Hisarcıklıoğlu said, “Lawsuits were both long and always unfair to employers. As a result of our efforts, in 2018, mediation became mandatory in labor-employer disputes. Subsequently, in 2019, mediation was made mandatory in commercial disputes. In the past, a case could last for 2-3 years. Through mediation, a solution can be provided in 1 week, and no longer than 2 months. Mediation is also a win-win method. The parties reach agreement. Thus, mediation contributes to social peace. When we look at the results, in disputes between the employer and the employer, in 70% of 350,000 cases, parties reached agreement, thanks to mandatory mediation. Here at TOBB, we strive to spread both mediation and arbitration throughout our country and our business world. In this context, we first established the TOBB arbitration within our own structure. We began establishing Arbitration and Mediation Centers in our chambers in 81 provinces. We call on all employers first to use them and to solve their problems.”

- Call for e-Commerce

On the other hand, TOBB President Hisarcıklıoğlu stated that there are also applications that lead to unfair competition in the sector, and that discount stores and ‘private label’ branded products prevent the growth and branding of SMEs. Hisarcıklıoğlu said, “This situation is breaking the competition within the sector itself. On the one hand we urge for branding, but we're making it difficult. If this isn’t prevented, we will not have a national industry. Our industrialist and manufacturer are also being outsourced. Then these must also be monitored. We are also pushing for a revise of the Retail Law. When we make demands from the public we must first look to ourselves. Those who cannot keep up with technology get left behind. Future is in e-commerce. Annual growth in the retail sector around the world is 3-4%. But global e-commerce sales are growing by 16%. There are great opportunities for those who can latch onto this trend in the world. We are the 17^th largest economy in the world. But we're 49^th in e-commerce. The share of e-commerce is still only 3%. But you can reach 70 million people through mobile in Turkey. You can adapt this to the fastest. You must be entrepreneurial and courageous. As local chains you already have these 2 features. e-commerce sales are estimated to reach 50 billion TRY in 2018. Average e-commerce volume grew by 30% annually in the last 5 years in Turkey. Among us, whose turnover is growing this fast? 1 out of 4 people made purchases on the internet. And this rate continues to increase. I told you that retail trade has fallen 6% in the last two months. But in the same period, online sales grew by 23%. Therefore, we are obliged to use the Internet more effectively.”

Stating that according to research, 81% of consumers research online before making a purchase, Hisarcıklıoğlu said, “Consumers can now see if the product price is too high and discover more suitable alternatives in just a couple of clicks. Another trend in the world is that retailers focus on social media ads. Companies can appeal to specific audiences based on targeted advertisements, demographics, interests and behavior. Facebook has 6 million; Instagram has 2 million advertisers. Advertising spending on social media is on the rise. There is a growth of over 20% on an annual basis. For example, in 2018, a quarter of the total digital advertising spending in the UK was directed to social media platforms. Leading retailers use the power of social media to reach more customers. In short, life is evolving rapidly, digitally. Consumers are on digital platforms. The consumer also brings his shopping to digital. Product analysis; product benchmarking; query of what, where, how; brand experience; experience sharing; are all on the internet. Therefore, the retail sector should use 2019 as the year of digital moves. Our agenda should include: User-friendly digital channel designs, mobile compatibility, online business-making strategies, digital visibility. The future of our sector is bright. Because Turkey is very rapidly urbanizing. In 1950, only 25% of the population were in cities. Now this rate has exceeded 80% and continues to increase. A process that took 100 years in Germany took place in just one generation. On the other hand, we have become more mobile. The number of motor vehicles, more than 34 years ago, in 1985, was only 1 million. 4 million in 1999, 7 million in 2009. Over 12 million in 2019. We have a large population which wants to consume more urban, more mobile, faster and easier. We are the sector that will reach them the fastest. So let's preserve our sector. Let us protect our companies. And also give more space to women in our companies, especially at the level of management. Because in consumption decisions, women’s choices are decisive. So you need to know women's perspectives. In addition, women work diligently in business. They have strong foresight. Their leadership skills are superior. We have a period of no elections for close to 4 years ahead of us. We must focus on the economy in this period. We have to solve structural problems. With the continuation of the recovery in the economy and especially in the tourism sector, we expect the demand for other sectors, especially retail, to increase. In addition, Istanbul's new airport will also reflect positively on the retail sector. The increase in tourism inflows from the Middle East, Africa and the Far East will be the driving force for our retail sector. As TOBB, we will always support our sector and continue to extoll your importance in Ankara. Because every step that will strengthen you and our sector is reflected positively on the economy. We will continue to develop our sector by working in cooperation with the public and private sectors.”