international market

Turkiye: Main Mistakes in Organising Export

STARTINFORUM Business, Economy, Export from Turkey , , , 0 Comment

Exporters from Turkey, especially novices, often face a range of challenges and make common mistakes that can hinder their success. These issues can stem from a lack of experience, insufficient research, or external economic factors.

Here are the main mistakes and challenges faced by Turkish exporters.

I. Lack of Thorough Preparation & Market Research

  1. Insufficient Market Research: This is arguably the most fundamental mistake. Exporters often:
    • Fail to identify genuine demand for their product in target markets.
    • Don’t fully understand customer preferences, local tastes, or cultural nuances.
    • Neglect to thoroughly research competitors (local and international) and their pricing strategies.
    • Don’t factor in local distribution channels and how their product will fit in.
  2. Not Understanding Target Market Regulations & Standards:
    • Failure to obtain correct certifications: Many products require specific certifications (e.g., CE marking for Europe, Halal certification) or health/phytosanitary certificates. Not having these leads to goods being held at customs, fines, or rejection.
    • Ignoring local import duties and taxes (VAT): Underestimating the total cost to the buyer (DDP – Delivered Duty Paid) can make their product uncompetitive.
    • Incorrect commodity codes (HS codes): Using the wrong 10-digit HS code can lead to higher duties, fines, or delays.
    • Non-compliance with labeling and packaging rules: Different countries have specific requirements for product information, language, and packaging materials.
  3. Inadequate Due Diligence on Buyers: Especially for payment methods other than cash in advance or confirmed Letter of Credit, Turkish exporters might not thoroughly vet their international buyers’ creditworthiness or reliability, leading to payment delays or defaults.

II. Operational & Logistical Errors

  1. Incomplete or Inaccurate Documentation: This is a recurring problem. Missing or incorrect documents like commercial invoices, packing lists, bills of lading/air waybills, or certificates of origin are a primary cause of customs delays, extra shipping costs, and even cargo disputes or seizures.
  2. Underestimating Total Costs: New exporters often focus only on product cost and main logistics. They fail to account for “hidden” costs such as:
    • Banking fees, insurance.
    • Customs examination fees, warehouse costs at destination.
    • Cost of potential returns, defective products.
    • Marketing and e-commerce marketplace fees (if applicable).
  3. Poor Logistics Management & Unreliable Transportation:
    • Not choosing the most suitable or safest transportation method for their product and destination (e.g., trying to use sea freight for a time-sensitive, high-value product).
    • Working with unreliable freight forwarders who lack experience in specific routes or with certain types of goods.
    • Ignoring insurance coverage for shipments against loss, damage, or theft.
  4. Substandard Quality Control: Assuming the producer understands all requirements or that defects can simply be shipped back to the supplier is a costly mistake. Lack of proper quality inspection before shipment can lead to dissatisfied customers, damaged reputation, and costly returns or discounts.

III. Financial & Economic Vulnerabilities

  1. Vulnerability to Currency Fluctuations: With the Turkish Lira’s volatility, exporters may not adequately hedge against currency risks, eroding their profit margins if the Lira depreciates significantly against their foreign currency revenue.
  2. High Input Costs & Low Productivity: Turkish industries, particularly labor-intensive ones like textiles and apparel, face increasing input costs (labor, energy) and can struggle with lower productivity compared to competitors in East Asia or North Africa, making Turkish products less price-competitive.
  3. Financing Challenges: High interest rates and financing costs in Turkey can make it difficult for exporters to access working capital or secure competitive loans, especially for SMEs.

IV. Strategic & Market-Related Weaknesses

  1. Over-reliance on Traditional Markets (e.g., EU): While Europe is a crucial market, over-dependence can be risky if demand there slows down. Not diversifying into new, growing markets (e.g., Africa, Central Asia, other emerging economies) can limit growth potential.
  2. Insufficient Value-Added Products: Turkey’s export structure still leans heavily on labor-intensive and capital-intensive goods. There’s a recognized weakness in exporting high-tech, innovation, and R&D-oriented products with high added value, which are key for long-term competitiveness.
  3. Lack of Branding and IP Protection: Neglecting to register trademarks or protect intellectual property in target markets can lead to imitation and loss of market share.
  4. Communication Barriers & Cultural Misunderstandings: Even with good English, nuances in communication and cultural differences can lead to misunderstandings with partners, distributors, or customers, affecting relationships and business outcomes.
  5. Not Leveraging Government Support & Incentives: Some exporters might not be fully aware of or effectively utilize the various support programs, loans, and credit insurances offered by Türk Eximbank and the Ministry of Trade.

To overcome these challenges, Turkish exporters, particularly novices, must prioritize thorough research, meticulous planning, risk management, continuous learning, and seeking professional advice from customs brokers, trade consultants, and legal experts.

For more guidance and recommendations for your business to enter the international market with your products and services, please feel free to contact us.

Countries Which Should be Taken with Precautions: Guidance for Turkish Exporters

STARTINFORUM Business, Economy, Export from Turkey , , 0 Comment

Identifying a country that absolutely shouldn’t be targeted with any Turkish exports is a strong statement, as even very challenging markets might have niche opportunities. However, based on various factors, there are countries where the effort, risk, or lack of demand would make them highly unfeasible or inadvisable for Turkish exporters, especially novices.

Here are the categories of countries that should generally be avoided or approached with extreme caution, and specific examples.

1. Countries under Comprehensive International Sanctions

  • Reason: Exporting to countries under severe international sanctions (especially from the UN, US, EU) carries immense legal and financial risks for the exporter, their bank, and their country. Transactions can be blocked, assets frozen, and severe penalties imposed. Even if Turkey itself doesn’t impose the same sanctions, engaging in such trade can lead to “secondary sanctions” or a loss of access to international financial systems.

  • Examples of such countries (subject to change and varying degrees of sanctions):
    • North Korea: Virtually impossible to conduct legitimate trade due to extensive UN, US, and other sanctions.

  • Iran: While Turkey has historical trade with Iran, extensive US sanctions (especially secondary sanctions) make it extremely risky for most Turkish businesses, particularly those dealing in sectors covered by sanctions (e.g., oil, financial transactions) or using US dollar transactions.

  • Syria: Heavily sanctioned by the US and EU. Trade is severely restricted and highly risky.

  • Russia (for certain goods/end-users): While Turkey has not fully aligned with Western sanctions on Russia, exporting certain goods (especially dual-use items, high-tech components, or anything that could aid Russia’s military) can still incur risks of secondary sanctions from the US/EU. This is highly context-dependent on the specific product and end-user.

  • Cuba: Under long-standing US embargo.

2. Countries with Active Trade Bans or Severe Restrictions Specifically Against Turkish Goods

  • Reason: If a country has deliberately imposed bans or extremely high non-tariff barriers on Turkish products due to political or economic reasons, market entry becomes virtually impossible or highly unprofitable.

  • Example:
    • Armenia: Following the Second Nagorno-Karabakh War, Armenia imposed a ban on all products of Turkish origin (with some exceptions for raw materials). While temporary bans have expiry dates, the underlying political tension makes it a very difficult market. Even historically, trade was largely unidirectional (Turkish exports to Armenia).

3. Countries with Extremely Limited Demand or Purchasing Power for Turkish Products

  • Reason: These are often the Least Developed Countries (LDCs) or nations facing severe economic crises, civil unrest, or extremely small populations with very low per capita income. The cost of logistics might far outweigh any potential revenue.

  • Examples (general categories, as specific situations can vary):
    • Countries in active conflict zones: (e.g., Yemen, parts of Sudan, Afghanistan) – Security risks, destroyed infrastructure, and collapsed economies make trade highly impractical and dangerous.
    • Very small island nations with limited economies: (e.g., some Pacific Island nations) – Unless you have a highly specialized niche product, the logistics costs and tiny market size make it uneconomical.
    • Countries with extremely low GDP per capita and high self-sufficiency in relevant sectors: If a country produces most of what it needs locally and its population has very limited disposable income, demand for imported goods (especially higher-quality Turkish goods) would be minimal.

4. Countries with Unacceptable Levels of Business Risk

  • Reason: High levels of corruption, extreme political instability, very weak rule of law, or severe currency convertibility issues can make doing business impossible or fraught with unacceptable risk of non-payment or asset seizure.

  • Examples: This is less about specific countries and more about the current context of certain nations. A country might be promising one year and highly risky the next due to internal conflicts or political upheaval. Always check current political stability ratings and corruption indices (e.g., Transparency International).

Important Caveats

  • Niche Opportunities: Even in highly challenging markets, there might be a very specific, high-demand, high-margin niche for certain goods. However, this is usually for experienced exporters with significant risk tolerance and local knowledge.

  • Humanitarian Aid: Exporting goods for humanitarian aid or specific government-to-government projects might bypass some commercial restrictions, but this is a very different business model.

  • Dynamic Landscape: Geopolitical situations and economic conditions change rapidly. What’s a “no-go” today might be a cautious “maybe” next year, and vice-versa. Always stay updated on international relations and trade policies.

For a novice Turkish exporter, the best advice is to avoid any country that presents significant sanctions risk, explicit trade bans, or extreme political/economic instability that would directly impede basic commercial operations. Focus on markets with established demand, stable economies, and good trade relations with Turkey.

For more guidance and developing an effective strategy of exporting goods from Turkey, please feel free to contact us.

Export Trends from Turkey to Azerbaijan

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Turkey and Azerbaijan, bound by strong historical, cultural, and political ties (“one nation, two states”), exhibit robust and diversifying trade relations.

While Azerbaijan’s exports to Turkey are dominated by energy products (petroleum gas, crude petroleum), Turkish exports to Azerbaijan are much more varied, reflecting Turkey’s industrial and manufacturing strength.

Here’s a breakdown of the export trends from Turkey to Azerbaijan.

Overall Trade Dynamics & Trends

  • Growing Trade Volume: Over the past 5 years (leading up to March 2025), trade between Turkey and Azerbaijan has grown at an impressive annualized rate of approximately 14.1-14.4%. This signifies a strong upward trend in bilateral economic activity.

  • Trade Balance Favors Azerbaijan (Overall): In terms of total trade, Azerbaijan typically has a significant trade surplus with Turkey due to its substantial energy exports.

  • Trade Balance Favors Turkey (Non-Energy): When looking at non-energy goods, Turkey usually maintains a positive trade balance with Azerbaijan, exporting more manufactured and consumer goods than it imports in these categories.

  • Recent Fluctuations (March 2024-2025): In March 2025, Turkey’s exports to Azerbaijan saw a slight decrease of 1.12% compared to March 2024 ($212M vs $215M). However, this is a very short-term snapshot and the long-term trend remains positive.

  • Strategic Goals: Both countries aim to further increase their bilateral trade volume, with ambitious targets set by their leadership.

Top Export Categories and Their Trends

Based on recent data (primarily 2023-2024 figures, as these provide a comprehensive annual view, supplemented by March 2025 data):

1. Packaged Medicaments / Pharmaceutical Products: This is a consistently strong and often the top Turkish export to Azerbaijan.

Trend: Shows high and sustained demand, reflecting Azerbaijan’s healthcare needs and reliance on imported pharmaceuticals. In 2023, it was the top export at $68.2M. In 2024, Pharmaceutical products were $48.44M, showing continued significant value.

2. Machinery, Nuclear Reactors, Boilers, and Electrical/Electronic Equipment: This is a very significant and growing category, driven by Azerbaijan’s ongoing industrialization, infrastructure development, and modernization efforts.

Trend: Consistently among the highest value exports. In 2024, “Machinery, nuclear reactors, boilers” was a massive $456.88M, and “Electrical, electronic equipment” was $344.40M. This indicates a strong and sustained demand for capital goods.

3. Vehicles (other than railway, tramway) / Cars: Azerbaijan imports a substantial number of vehicles from Turkey.

Trend: In 2023, “Cars” alone accounted for $60.8M. “Vehicles other than railway, tramway” was $140.58M in 2024. This reflects increasing consumer purchasing power and a need for transportation.

4. Textiles and Apparel: Turkey is a leading supplier of textiles and ready-made garments to Azerbaijan due to proximity, quality, and design appeal.

Trend: Consistent and significant. In 2024, “Articles of apparel, not knit or crocheted” was $113.93M, and “Articles of apparel, knit or crocheted” was $107.49M. “Carpets and other textile floor coverings” also show a notable presence ($12.91M in 2024).

5. Plastics and Plastic Products: Used in various industries, packaging, and consumer goods.

Trend: Solid and growing. $158.62M in 2024, indicating high demand across multiple sectors.

6. Iron and Steel Articles: Essential for Azerbaijan’s construction and infrastructure projects.

Trend: Stable demand. $101.66M in 2024 for “Articles of iron or steel” and $45.60M for “Iron and steel.”

7. Furniture, Lighting Signs, Prefabricated Buildings: Reflects ongoing construction and urban development.

Trend: Strong, with $97.16M in 2024.

8. Food Products: Azerbaijan imports a variety of food items from Turkey to meet domestic demand.

Trend: Consistent. “Cereal, flour, starch, milk preparations” was $64.14M in 2024, and “Edible fruits, nuts, peel of citrus fruit, melons” was $22.75M.

9. Defense and Aerospace: While specific detailed figures are less public, post-2020 Karabakh War, cooperation in the defense industry has intensified. Azerbaijan has expressed interest in Turkish drones (like Bayraktar TB2) and other military equipment.

Trend: This is a strategically important and rapidly growing area of cooperation, though not always reflected in general trade statistics due to its sensitive nature. “Arms and ammunition, parts and accessories” was $87.84M in 2024.

Contributing Factors to Export Trends

  • “One Nation, Two States” Philosophy: The deep political and cultural affinity translates into strong economic ties and a preference for Turkish products and services.

  • Preferential Trade Agreement (PTA): The PTA between Turkey and Azerbaijan, which came into force on March 1, 2021, has likely provided a significant boost by reducing tariffs on many goods, making Turkish products more competitive.

  • Turkish Investments in Azerbaijan: Turkish firms have invested significantly in Azerbaijan (around $12 billion until 2020 in the non-oil sector), particularly in construction, telecommunications, and banking. These investments often create a demand for Turkish machinery, materials, and expertise.

  • Logistics and Connectivity: Shared borders and improving transportation links (e.g., Baku-Tbilisi-Kars railway) facilitate trade.

  • Modernization and Diversification of Azerbaijani Economy: As Azerbaijan works to reduce its reliance on oil and gas and develops non-oil sectors (agriculture, manufacturing, tourism, construction), the demand for diversified imports from Turkey naturally increases.

In summary, Turkey’s export trends to Azerbaijan are characterized by high-value industrial goods, essential consumer products, and strategic defense items, all underpinned by strong bilateral relations and a commitment to increasing trade volume.

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