Lokum.com

What did it do?

Lokum.com was a regional food e-commerce site set up at the end of 2012 by Yemeksepeti, Turkey's leading online food ordering company. It worked with small producers making goods of organic quality and sold Anatolia's regional specialities online, from Turkish delight and sucuk to cheese, seafood and olive oil.

Why did it shut down?

In a statement in March 2015, Yemeksepeti said it was closing Lokum.com because it wanted to channel its existing resources into other lines of business. In other words, regional food sales had fallen behind food delivery on the company's list of priorities. No turnover or user figures were shared at the closure, which makes it hard to judge how big the business had become from the parent company's point of view. Employees were offered other roles within Yemeksepeti. According to a 2016 assessment by the Turkish business magazine Turkishtime, the site's logistics costs were very high, product wastage was high, and its pricing policy confined it to a small target audience. The closure of irmik.com months later on the same grounds suggests the decision was less about the failure of a single product than about the parent company's choice to focus.

The story

At the end of 2012 Yemeksepeti was not just Turkey's biggest food ordering site; with a USD 44 million investment from General Atlantic, it also had its eye on new areas. One of the spin-off brands set up at the time was Lokum.com. The site aimed to bring online shopping together with the regional specialities of Anatolia.

According to a 2013 round-up by egirişim, Lokum.com worked with producers making goods of organic quality. Its shelves held a selection ranging from Turkish delight and sucuk to cheese, seafood and olive oil. Customers could have products they would struggle to find in chain supermarkets delivered straight to their door. Around the same time Yemeksepeti had also launched irmik.com, which offered wholesale supplies to restaurants, and the reservations site Papyon.

Lokum.com lasted about two and a half years. According to a Webrazzi report on 27 March 2015, the site stopped taking new orders from that day, and existing orders were fulfilled. Yemeksepeti's statement was brief: resources within the company would be redirected to other lines of business. Lokum.com employees were offered other positions within Yemeksepeti. No turnover, order or user figures were shared with the closure.

The timing of the closure was also notable. A few months later Yemeksepeti joined Delivery Hero, and in the autumn of the same year irmik.com closed too. In a 2017 list of closed e-commerce sites compiled by the Turkish news outlet Habertürk, Lokum.com appeared as a Yemeksepeti venture that lived from 2012 to 2015, with particular emphasis on the line about redirecting resources in its closure statement.

Lokum.com's story shows that the backing of a strong parent company is also a source of fragility. Regional food sales were born in the shadow of a big brand, but among priorities competing with the core business of food delivery, their turn never came. When the parent company decided to focus, a small vertical that had never made its numbers public quietly closed.

Lessons for founders

• A strong brand's customer base does not guarantee sales in a different category.
• In an internal venture, the battle for resources is real; if you cannot show your contribution to the core business in numbers, you will be the first to close.
• With regional and artisan products, work out supply and logistics costs from the start; basket values may stay low.

Sources

1. Yemeksepeti's regional food venture Lokum.com has closed [Updated] (Webrazzi, 2015-03-27)
2. Yemeksepeti's ventures: İrmik, Papyon and Lokum (egirişim, 2013-09-14)
3. Turkish e-commerce sites that closed before Markafoni: why did online shopping sites shut down? (Habertürk, 2017-06-02)
4. Shopping sites that have closed so far (Kartal 24, 2017-06-02)
5. 50 failed start-ups and 50 lessons from their mistakes (15–30) (Turkishtime, 2016-05-06)

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