Bukoli

What did it do?

Bukoli was a delivery venture launched in 2014 by Borusan Lojistik, the logistics arm of the Turkish conglomerate Borusan. Instead of having parcels brought to their homes, online shoppers could collect them at a time that suited them from Bukoli points, made up of neighbourhood businesses such as corner shops, stationers, florists and pet shops, or from smart lockers called Bukolimatik. The service was offered in Istanbul as a delivery option on partner e-commerce sites.

Why did it shut down?

According to an email Borusan Lojistik sent to its business partners in June 2017, it had not been possible under current market conditions to continue Bukoli in a way that created the most value for all parties. The company gave no further reason. The model depended on a network intended to stretch across thousands of points reaching enough parcel density at each one; because the service was offered as an option on partner sites, volume depended largely on the choices of e-commerce partners and shoppers. This last assessment is an interpretation. The closure came a few days after Markafoni, a partner, announced its own closure; the sources do not say whether the two decisions were linked.

The story

Everyone who shopped online knew the line: "We came by, but you weren't in." Borusan Lojistik answered that problem with an internal venture called Bukoli. According to a statement the company made later, Bukoli began operating in 2014 and was positioned as one of the group's innovative business models.

The idea was to take parcels not to the home but to the neighbourhood. At checkout, shoppers chose the Bukoli point nearest to them and could collect their parcel there after work or at the weekend. These points were neighbourhood businesses such as corner shops, grocers, stationers, florists and pet shops. According to Webrazzi's launch report in October 2015, Bukoli had reached 480 points across 33 districts of Istanbul and aimed to grow to 2,500 points in the city within five years, then expand to Izmir, Ankara, Bursa and Antalya. Its first partner sites included 1V1Y, kitapyurdu, e-bebek and Evidea.

The network grew the following year. According to a promotional article published on Webrazzi in August 2016, more than 600 shopkeepers in Istanbul were working as Bukoli points and the service was offered as an option on 18 e-commerce sites. Smart lockers called Bukolimatik had been installed at locations including the Yenikapı and Bostancı İDO ferry terminals and Zorlu Center. By June 2017 the network covered the whole of Istanbul, and a partnership had been struck with Markafoni for same-day delivery.

But the news that month was not an expansion; it was a closure. In an email to its business partners, Borusan Lojistik wrote that it was ending the Bukoli operation because it had not been possible under current market conditions to continue the venture in a way that created the most value for all parties. It asked sites to remove the Bukoli option and said orders placed by 30 June 2017 would be delivered. On 29 June, egirişim reported that the service had officially ended.

Bukoli's story shows that even a cleverly designed distribution idea does not become economic without enough parcel density. The backing of a powerful group grew the network quickly, but size alone was not enough to carry the business.

Lessons for founders

• In a delivery network it is not the number of points but the number of parcels per point per day that determines the economics; measure the two separately.
• If your volume depends on an option on other companies' checkout pages, track early how often that option is chosen.
• In a corporate venture, agree from the outset at what threshold the parent company will pull the plug.

Sources

1. Bukoli has closed (Webrazzi, 2017-06-05)
2. Bukoli to close on 30 June (egirişim, 2017-06-05)
3. Bukoli officially ends its services (egirişim, 2017-06-29)
4. Borusan is closing Bukoli (Capital, 2017-06-05)
5. Bukoli: a new-generation delivery model for online shopping (Webrazzi, 2015-10-12)
6. No more waiting in for parcels with Bukoli! (Webrazzi, 2016-08-18)

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