# BolBol (2014 – 2016)

- URL: https://girisimcikafasi.com/en/startup-graveyard/bolbol/
- Sector: Food and drink
- Country: Turkey
- Total funding: unknown
- Cause of closure: Lost to competitors

## What did it do?

BolBol was an online food-ordering platform launched in 2014 by Emre Aydın, founder of Çiçeksepeti, the Turkish online flower and gift retailer. Unlike its rivals, it charged restaurants no commission on orders and planned to earn its revenue from marketing services such as banners, SMS and email. It operated only in Istanbul, and in 2015 it moved into grocery shopping as well, announcing BolBol Market, which aimed to deliver in around 60 minutes.

## Why did it shut down?

BolBol could not build a large enough restaurant network against Yemeksepeti, the first mover and dominant player in the Turkish market. In November 2014 the company applied to the Turkish Competition Authority, arguing that chain restaurants would not work with it because of the contract terms Yemeksepeti imposed on restaurants. In June 2016 the Competition Board fined Yemeksepeti about 428,000 TL over the most-favoured-customer clause in its restaurant contracts. But the decision came too late for BolBol: at the oral hearing a company representative said BolBol had reached the point of closing, and two weeks later the site became unreachable. It might be added, as an interpretation, that the commission-free model could not generate enough revenue for a platform struggling to sign up restaurants.

## The story

Emre Aydın had succeeded in the online gift market with Çiçeksepeti, which he founded in 2006. In 2014 he turned his attention to a more crowded space: food ordering. BolBol started out with mobile apps and opened its website in September 2014. According to a Webrazzi report that day, the platform had 1,044 restaurants and around 75,000 menu items.

The most striking thing about BolBol was its business model. It charged restaurants no order commission and no entry fee, planning instead to earn its revenue from marketing services such as banner advertising and SMS and email campaigns. Users, meanwhile, earned points and badges with every order. In 2015 the company also stepped into grocery shopping, announcing BolBol Market, which aimed to deliver in around 60 minutes.

The problem was getting restaurants onto the platform. In November 2014 BolBol applied to the Turkish Competition Authority. According to the complaint as recorded in the Competition Board's decision, the company argued that because of Yemeksepeti's contract terms and pressure, not a single chain restaurant would work with it, and that some restaurants had been forced to leave the platform. The same decision also recorded that BolBol had spent half of its investment on software and 40 per cent on field operations.

The process dragged on for more than a year and a half. At the oral hearing on 31 May 2016, Faruk Kayabaşı, speaking for BolBol, said the platform had reached the point of closing because of unfair competition. In June 2016 the Competition Board fined Yemeksepeti about 428,000 TL over its most-favoured-customer clause. In the same days Webrazzi reported that bolbol.com could no longer be reached and that the brand had been removed from Çiçeksepeti's list of group brands. An update to the report, citing a source close to the matter, said BolBol had closed and that an executive had said they shut it down during the investigation; no separate closure announcement from the company itself has been found.

BolBol's story shows how hard a fight a late entrant faces in a market with strong network effects. It had an experienced entrepreneur, a different business model and a big e-commerce brand behind it. But restaurants and users had already gathered on a single platform, and by the time the legal process concluded it was too late for the company.

## Lessons

- In a market with strong network effects, a second entrant cannot pull ahead on a price advantage alone.
- Legal processes are slow; do not let a competition complaint stand in for your business strategy.
- A commission-free model sounds attractive, but prove early that the alternative revenue streams really scale.

## Sources

- [BolBol.com? [Updated] (in Turkish)](https://webrazzi.com/2016/06/15/bolbol-com-kapaniyor/)
- [Competition Board decision, file 2014-3-87, decision 16-20/347-156 (in Turkish)](https://www.rekabet.gov.tr/Karar?kararId=0bd0157a-2b4d-43ce-85a3-2af821bb387b)
- [Emre Aydın's food-ordering venture Bolbol.com launches on the web after mobile (in Turkish)](https://webrazzi.com/2014/09/19/bolbol-com-web-girisimi/)
- [Bolbol.com files complaint in Yemek Sepeti investigation, Nevzat Aydın presents defence (in Turkish)](https://webrazzi.com/2016/06/01/yemek-sepeti-sorusturmasinda-bolbol-com-sikayetci-oldu-nevzat-aydin-savunma-yapti/)
- [Competition Authority fines Yemek Sepeti 428,000 TL (in Turkish)](https://digitalage.com.tr/rekabet-kurumundan-yemek-sepetine-428-bin-tl-ceza/)
- [Food delivery service BolBol moves into supermarket shopping (in Turkish)](https://webrazzi.com/2015/07/08/bolbol-yemek-teslimat-supermarket-alisveris/)