What are the industry’s dominant economic characteristics?
In this market there are 163.948 companies and 1.240 of these companies are large companies
forming %45,8 of the market size and dominating the market. The market size of the industry is
approximately 3 million thousand Turkish Lira (Sector ID, 2020). We take 4 biggest wholesaler
companies which are Bizim Toptan, Metro, Migros and Tespo as competitors, these companies
compete in the national zone. When we research about 1.240 companies most of them working
local and regional. For determining prices of the product, it is important to know surplus in the
market. Because in this industry most of the prices are determined by the demand and supply
curve. When we look up the crowd in the industry, we mentioned earlier in this industry there are
24637 companies and only 0,7% of these companies are large companies and these companies
dominate the 45,4% of the net turnovers in this industry. The strategy of most companies in this
industry to meet the needs of customers according to their segments (Bizim Investor Relations,
2021). Wholesalers in this industry generally work with hotels, restaurants, café, gas stations etc.
Therefore, the needs of the market are segmented to customers’ profile. So, the industry is
characterized by customer wants, needs and preferences and these needs divide the market into
sub-segments (Metro-TR, 2021). In the last few years with the rapid development of E-
commerce, technology started to play a key role in the industry. Some large companies created
online sales platforms and with these platforms they aim to reach the whole country although
they do not have retail shops in a city (Webrazzi, 2018). Larger companies have large
technological capabilities and continue to invest in this area. 4 large companies that we are
researching have their own website and 2 of them also provide E-commerce via their website.
How strong are the industry’s competitive forces? (Five-forces analysis)
To analyze the industry in which Bizim Toptan is located in terms of competition, we used the
"Turkish HTM Retailing Sector Review Preliminary Report" published by the Turkish
Competition Authority in 2021. When we use the Five-forces analysis, the first thing we can see
from the report is that the sector is transitioning to an organized, modern channel, including
Bizim Toptan. Grocery stores, small, local markets are giving way to hypermarkets and
supermarkets. According to the report, small markets are constantly losing market share. We can
say that the industry is highly concentrated. A large part of the total market has been obtained
mainly by 5-6 chain markets. This is important for our review of rivalry among competing
sellers. The absence of new entries to the market indicates that there are high entry barriers for
new entrants to the market. In addition to these, it is stated in the report that there is no equal
access to distribution channels. Besides all this, we can see that the buyers are in a strong
position. The report explains that all retailers have increased their purchasing power and gained
significant buyer power vis suppliers. In the light of all this, we can say that although the
competitive environment is not moderate; with the presence of high entrance barriers, the strong
position of buyers against suppliers and the ever-growing market share, the competitive
environment in the sector is attractive in terms of making profits.
What are the industry’s driving forces of change and what impact will they
have on five-forces?
Being a wholesale supermarket changes in cost, efficiency and price is considered one of the
most important driving forces in the industry since the customers are generally price sensitive
. Another force is the number of stores and their locations in order to reach the maximum
number of customers. The emergence of the ecommerce and online market online stores is an
uprising force that leads to capturing a new segment of customers. Finally distribution
technologies are important in order to have a wider reach across turkey.
How are industry rivals positioned?
Bizim Toptan is located in 70 cities of Turkey with 173 retail stores (Bizim Investor
Relations, 2021). When we compare the product prices with other wholesalers it’s prices are
a bit higher than other competitors (Bizim Toptan E-commerce, 2021). But they have
advantage with the number of stores and E-commerce website. Another rival Tespo has 21
stores in 10 cities in Turkey. Their slogan is “Leading brands, wholesales prices” so they are
expressing that they offer high quality products with low prices. Their prices are a little bit
higher than Bizim Toptan. They have disadvantages because they have fewer stores
compared to big players in the industry. Migros Toptan is another competitor that has 24
store locations across Turkey. Their prices are a bit higher than bizim’s but they have a wider
range of products and also have an e-commerce website. They are positioned as more high
end than bizim because they offer a range of specialty products such as wines and cheese but
at wholesale prices and quantities. They are still on the rise and might turn into a strong
competitor because of their existing experience and expertise in the supermarket industry.
Finally Metro has 36 stores in 21 cities in Turkey. When we examine the wholesale-retail
market, Metro is located above Bizim Toptan. Bizim Toptan has a supermarket chain called
Şok, but Metro has lost its supermarket chain (Real) over the years.
Does the industry offer good prospects for attractive profits?
Bizim Toptan is a company which operates in wholesale trade, except motor vehicles and
motorcycles industry. This industry offers good prospects for attractive profit because
according to TCMB, gross sales of companies which operate in this industry increased by
%583.17 in TL base and %25.75 in US dollars base during 2009-2020.
Also, net profits of these companies increased by %634 in TL base and %35 in US Dollars
base during 2009-2020. Moreover, it is noted that %60 of these companies make profit and
considering the fact that there are more than 160.000 companies, the ratio is high.
Other than that, average inventory turnover ratio is 8.6, which means that they have good
balance in terms of holding their stocks and they don’t have to order new stocks frequently.
Net Profit / Shareholders Equity is %19.3 which is very good and means that they are very
efficient in terms of generating profit. Also, their Gross Profit Margin is %24, which means
that they have high capability in terms of making money from their products. In conclusion,
their revenues keep increasing and financial ratios are very good so it can be said that this
industry offers good prospects for attractive profits.
REFERENCES
[Link]
sitesi-bizimtoptan/
[Link]
[Link]
[Link]
and-motorcycles
[Link]
[Link]
raporlari/htmperakendeciligisektorincelemesionraporu-20210705115428725-pdf
