How Turkey built the world’s most advanced urban logistics ecosystem
Erin Konak Kandiyoti | Kevin Daniel
Imagine ordering groceries in the world’s most traffic-congested city and having them delivered within the hour. This has become the reality for Istanbul residents, made possible by Turkey’s reinvestment into logistics infrastructure. A digitized government, widespread buy-now-pay-later (BNPL) usage, and a growing network of dark stores across the city have together shaped a logistics network that quietly outpaces delivery speeds in many higher-income countries. Turkey’s logistics system is unusual because its delivery networks, payment habits, and e-government infrastructure developed together, creating an ultra-modern domestic supply chain ecosystem.
Turkey’s credit-card installment system, known as ‘Taksit,’ dates back to the 1990s, when hacking bank transactions into installments led Yapi Kredi to launch its TaksitCard. This new system drew from a century-long legacy of vendor and consumer financing by making credit feel like routine rather than an unusual exception.
The 1980s liberalization exposed Turkish masses to banking, enabling 80M active cards today, with 40% of transactions being installments, compared to only 1.1% in the US. The IMF notes that deregulatory policies, such as liberalization of interest rates, credit allocation, and capital controls, enabled innovation to flourish, contributing to the digitalization of modern Turkey, including the ‘Taksit’ system, which predates American counterparts like Klarna by decades.
Getir, the largest Turkish delivery app, pioneered the use of dark stores, enabling 10-minute urban delivery times through geospatial analytics. These micro-warehouses, operating out of empty businesses, accelerate grocery and fast-moving consumer goods (FMCG) deliveries by reaching population crevices more efficiently. Recently, Uber also invested $200M+ to create a tech hub in Istanbul, recruiting 95% of taxis onto the app and nearing 100M rides, showing the potential for modernization of many systems. Additionally, Uber’s $700M acquisition of delivery service Trendyol Go demonstrates the profit potential of these platforms.
Despite all this domestic success, many of these systems have not been able to translate into other markets. Getir, for example, has tried expanding into many urban European and American markets. However, they recently had to pull out due to profitability struggles, proving that this ecosystem has its flaws, too.
On top of this, the transition to a completely digitized government, called e-Devlet, with ‘Devlet’ being Turkish for ‘government’, has established efficiency by centralizing all legal records, like contracts or taxes, into one portal, even tracing 10-generation family trees. 96% of the population uses the app to manage their legal documents, streamlining bureaucracy.
Having grown up in Turkey and spending every summer with my grandparents in Istanbul, I’ve seen the use cases of e-Devlet first-hand, too, with my parents handling all of my legal paperwork for taxes, military service, and driving license on a single app.
However, digitizing the whole country doesn’t come without its issues, as many elders who have never used the internet give their e-Devlet logins to trusted people, often before acknowledging potential consequences. Giving one person access to their whole lives poses the issue of corruption. Countless elders are taken advantage of for their life savings, especially if they don’t have anyone trustworthy in the family to manage their lives. Additionally, there is a risk that rural inhabitants may lack sufficient internet access to work with these digitized systems.
Despite these drawbacks, though, why does this system work so well exclusively in Turkey?
Turkey is vastly more urbanized than other relative nations: 78% of Turks live in cities, which is more than double the 32% who did in the 1960s. Istanbul alone has over 16 million inhabitants with a population density about 26 times the national average, making short, high-frequency runs more economically viable than in rural or sparser urban communities by creating a dense consumer base for quick delivery services.
On top of this, Turkey also ranks highly among the most digitally adept emerging markets, making widespread digital mandates like e-Devlet uniquely hard to replicate in other developing countries with weaker digital infrastructure.
Additionally, Turkish spending habits are a global outlier as the domestic economy is uniquely propped up by installment loans. However, due to Turkey’s volatile economy, especially with a rapid depreciation of the Lira, BNPL payments pose a way to finance this monetary instability. Consequently, Turkish banks have to set 50% annual APR rates to combat inflation, as opposed to average American rates of ~20%. Thus, ‘taksit’ is less about convenient shopping, but more a practical way to hedge against currency and inflation uncertainty.
Uniquely though, to bolster consumption, many Turkish retailers offer interest-free installments at the point of sale. Without implementing similar incentive systems in other markets, it is tough to achieve such levels of installment ‘debt’ and spending. Personally, I believe low economic confidence is the cause, as the average Turkish consumer simply does not trust banks enough to keep their money risk-free while also providing them with any significant ROI under such unknown exchange rate circumstances. Overall, this leads to Turkish households having near-zero saving rates, compared to 7% for American consumers and 15% for European ones, highlighting how consumer behavior prioritizes current spending over long-term saving.
When combined with e-Devlet and UYAP, the digital judicial system, these factors reduce friction for companies exchanging money and for citizens interacting with the rest of the economy.
Furthermore, global investment has turned Turkey into a cross-continental hub for logistics and exports, siphoning deep supply-chain expertise to the country. Deals like a $1.1 billion takeover of a multipurpose app HepsiBurada by Kazakh investors, or a $1.4 billion Alibaba investment into Trendyol directly treat Turkey as the world’s premier fulfillment nation.
Even as Turkish firms like Getir exit external markets, they continue to keep domestic business as a core segment. This underscores the favorability Turkey’s one-of-a-kind ecosystem brings, where often more scattered, car-dependent, and administratively fragmented western counterparts fail.
For Western markets looking for insights, the uncomfortable truth is that it is nearly impossible to clone a digital Turkish business model without its three specific pillars: urban density, a unified electronic government, and consumerism fueled by installment-based debt.
Ultimately, the Turkish prototype is not a replicable one. The ultra-fast fulfillment services for urban Turkish residents are, unfortunately, built upon foundations woven into daily life through a forty-year transition from ‘third-world’ to an ‘emerging market,’ representing a specific historical trajectory that alas cannot be exported.
Erin Konak Kandiyoti (SEAS ’29) is a writer for the Columbia Emerging Markets Review studying Financial Engineering. He is interested in going into finance after graduating.
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