Consultant Insight: Alibaba expands Turkey presence

Turkey is becoming a focal point for Alibaba’s global reach as the e-commerce giant plans to invest $1 billion in a logistics hub at Istanbul Airport and a data center outside Ankara in Temelli. “We have a serious investment plan at Istanbul Airport [IST]. We can evaluate e-export plans from here to Europe, the Middle East and the Far East,” Alibaba Holdings President Michael Evans told Turkish newspaper Sabah. Alibaba’s global strategy has been well-documented. In 2019, Evans told attendees at the annual National Retail Federation (NRF) conference, “A big part of our globalization strategy is connecting brands and small businesses from all over the world directly to the Chinese consumer. China is a massive consumer market and an attractive growth opportunity for many businesses today and in the future. Many brands globally have not properly understood the China opportunity.” [caption id="attachment_68221" align="alignright" width="405"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] The COVID-19 pandemic slowed progress, but Alibaba is picking up where it left off in 2019, and it has its eye on Turkey, geographically a logical logistics hub connecting China with Europe, the Middle East and Southeast Asia. Turkish Airlines , which moved its main operations back to IST in 2022 , established a partnership with YTO Cargo Airlines — affiliated with YTO Express and a long-time logistics partner of Alibaba — in mid-2022. The agreement will strengthen air cargo connections between China, Central Asia and Turkey and build additional capacity, according to a July 2022 release. Cargo departing from Xi’an, China (XIY), is connected to Turkish Airlines’ Tashkent flights within the same day between TAS-IST. “We have been enhancing our cross-border business by offering door-to-door logistics solutions: from collection and distribution to freight transportation, cross-docking and final-mile delivery,” Turhan Ozen, chief cargo officer at Turkish Airlines, said in an interview for a Cargo-Partner blog. “This partnership brings us closer to becoming a key player in the e-commerce market.” While details of Alibaba’s investment in IST are currently unclear, the company will likely partner further with Turkish Airlines to use the cargo carrier’s air hub, SMARTIST, which opened in February 2022. The facility offers automated storage systems and an integrated warehouse management system. SMARTIST is expected to provide an annual capacity of 4 million tonnes and a total area of 340,000 square meters. Amazon’s presence in Turkey Alibaba’s investment in Turkey comes at a time of growing e-commerce within the country. Its competitor, Amazon, also took notice and with a $100 million investment, opening its first fulfillment facility in Istanbul in September 2022. “Our new logistics base that is equipped with the latest technologies will make significant contributions to us in supporting SMEs that make sales over Amazon.com.tr,” Amazon Turkey Country Manager Richard Marriott said during the opening of the facility. Amazon’s SME selling partners in Turkey have grown to more than 25,000, a 50% year-over-year increase, according to Amazon. SME exports from Amazon Turkey jumped more than twofold in 2021 from 2020 to reach $300 million, the company said . Turkey also has a relatively small data center market, so Alibaba will be just one of a few companies to build a data center in the country. None of the major U.S. cloud providers have data centers in Turkey. Alibaba Cloud operates a global network of 28 cloud regions and 86 availability zones. In 2022, Alibaba launched data centers in Bangkok, Tokyo, and Frankfurt, Germany. IST ranked No. 39 in Air Cargo World ’s most recent ranking of the Top 50 Cargo Airports based on 2021 throughput.

Consultant Insight: Alibaba expands Turkey presence

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