Turkey is a middle-income emerging market. A strengthening economy is bringing new prosperity to Turkish consumers, and the middle class is expanding. Its demographic profile, typical of upper World 2, features large youth cohorts that reinforce the country’s economic growth.
Turkey’s outlook and the values of its consumers are changing, too. Even as it continues discussions about entry into the EU, it is expressing a more organic identity that incorporates its Islamic roots and growing ties to the Middle East. Its consumers see their future with the EU, but are increasingly confident in Turkey’s independent regional role.
3 KEY FINDINGS
- Turkey’s economy is strengthening and the middle class is growing, boosting consumption.
- Wideincomedisparitiesmeanitis still a World 2 country; most Turkish consumers are price- conscious.
- Turkey’s youthful population creates opportunities in infant, child, teen, and young adult segments in particular.
3 DEMOGRAPHIC DRIVERS
- With some 77.8 million people, Turkey is a fairly large country—the 17th most populous as of 2010.1
- Like many World 2 countries, Turkey’s citizenry is young but aging, reflecting a now-waning population boom.
- Compared to the developed world, it has proportionately more people in younger cohorts. At the same time, aging has set in as Turkey’s larger cohorts get older.
3 POPULATIONS TRENDS
- Turks are young: Compared to populations in the developed world, Turks are young. About 20 million Turks are under age 15, compared to about 11 million in Germany, which has a comparably sized total population.2
- The population is growing: Turkey has a population growth rate of 1.2%—low compared to those of its Middle Eastern neighbors, but much higher than those of countries in Western Europe. Almost two Turkish babies are born for every one German baby. However, while Turkish births presently number about 1.3 million each year, they are expected to decline slowly in the next two decades.
- Turkey is aging: While the median age is only 28.3 — compared to Western Europe that has a median age of 42.2 — the median age is rising rapidly, currently increasing at a rate of two years for every five calendar years. Turkey’s senior population will rise rapidly. In 2010, 4.8 million Turks were age 65 and over. By 2025, 8.6 million Turks will be age 65 and over.
3 VALUES THAT ARE CHANGING
Turkey straddles Europe and the Middle East, and its outlook increasingly reflects that geography. It is taking on more European characteristics while simultaneously reasserting its Islamic culture and Middle Eastern ties.
- European expectations: Turkey has been interested in joining the EU and its predecessors for decades, but movement has always been slow. Most Europeans have been cautious about bringing a populous, comparatively poor, culturally distinct country into their union. Turkey has also failed to meet European standards of human rights, free speech, and minority rights, though it has improved in all these areas.
- “Back to Islam”—and the Middle East: As Turkey pursued a secular, modern identity during much of the twentieth century, it officially turned away from Islam, and from the Middle East. Secularism is retreating now that Turkey is more democratic. The Muslim identity of the average Turk has new outlets in politics, and Islamist political parties have created more legal and social room for religion. The rising business class is another spur: it tends to be more socially conservative and have a more Islamic identity than the secular elite who long ruled the country.
- As a result, Turkey’s Islamic heritage is more in evidence: Under the Ottomans, Turkey ruled wide swaths of the Middle East. Those ties are being revived through trade and culture. Turkish companies are gaining business throughout the region. Turkish exports are expanding, and Turkish brand names and TV shows are increasingly popular.41 The exchange is two-way: Turks are even importing Arab brides.
3 BUSINESS IMPLICATIONS
- Turkey is a fast-growing market, but it has an increasingly competent and vigorous business sector that will be ready to challenge incoming rivals in many product and service areas.
- Turkish income inequality is high, meaning that consumption patterns vary a great deal across income groups and regions, and between urban and rural areas. Consumers in western Turkey and especially Istanbul may resemble Europeans in many respects, while in poorer areas products and services appropriate for emerging markets may work best.
- As increasing numbers of Turks go online, companies will have to serve new Internet users who may have limited technical abilities or be skeptical about online security. The growth of the e-commerce market will depend on how quickly new users grow comfortable conducting online financial transactions.