Zidaya

What did it do?

Zidaya was an e-commerce site launched in Turkey in February 2012 by the German company builder Rocket Internet. It sold shoes, clothing, accessories and cosmetics, and occasionally featured technology products too. It quickly became one of Rocket's most visited sites in Turkey.

Why did it shut down?

Zidaya's fate depended less on its own performance than on Rocket Internet's decision about Turkey. On 17 August 2012 the company decided to close its Turkish operation, and most of its roughly 400 employees lost their jobs. Rocket gave no official reason for the exit; according to commentary reported by Wamda, returns in Turkey did not cover the cost of teams built on high salaries. Nurettin Özdoğan, writing as a guest author on Webrazzi, also argued that the vertical e-commerce model did not suit the Turkish market, where campaign-driven shopping dominated, and that profit margins were low. Zidaya carried on selling off its stock for a short while and then closed.

The story

Rocket Internet was a German company builder known for rapidly transplanting successful internet models to other countries. According to a feature Webrazzi put together in May 2012, the company entered Turkey in the second half of 2011, quickly reached around 400 employees and set up seven separate e-commerce ventures. The most prominent of these was Zidaya, launched in February 2012. There had been talk that Rocket would bring the Zalando brand to Turkey; instead, a new brand was created.

Zidaya sold shoes, clothing, accessories and cosmetics, and occasionally featured different products such as the new iPad. According to Webrazzi's calculations based on Google Ad Planner data, within a few months the site reached 550,000 unique visitors a month and climbed to 204th place in Turkey's visitor rankings. In early August Webrazzi reported that, because Zidaya was doing well, Rocket was considering carrying on in Turkey with this site alone.

A few days later the picture changed. On 17 August 2012 Webrazzi, citing information confirmed from inside the company, wrote that Rocket Internet was shutting down its Turkish operation entirely; the news was also picked up by foreign outlets such as The Next Web. A Zidaya official speaking to Sabah's Teknokulis page said the site had been closed to sales, that layoffs which began on 31 August would be completed on 14 September, and that the site would close once its stock ran out. Years later, Hürriyet columnist Sefer Levent recalled that Rocket had sold the products in its warehouses to rival sites.

Rocket Internet did not explain the reasons for its decision. Commentators converged on the view that the vertical e-commerce model did not suit the campaign-driven Turkish market and that returns did not cover the cost of teams built on high salaries. Zidaya's story shows that even when growth figures look good, a company's future can depend on the calculations made at headquarters.

Lessons for founders

• If you are part of a foreign company builder, your fate depends more on headquarters' portfolio decisions than on your local performance.
• A team built on high salaries for rapid growth can be dismantled just as quickly when return expectations are not met.
• Copying a model that works in another country without understanding a market's shopping habits is risky.

Sources

1. A look at the Turkish operations of Rocket Internet, lord of the clones [Feature] (Webrazzi, 2012-05-08)
2. Rocket Internet showcases its ventures with a new website (Webrazzi, 2012-08-07)
3. Rocket Internet is closing its Turkish operation! [Breaking] (Webrazzi, 2012-08-17)
4. Why did Rocket Internet leave Turkey? (Webrazzi, 2012-08-19)
5. Rocket Internet Exits Turkey, May Fire 400 People (The Next Web, 2012-08-17)
6. UPDATED: Rocket Internet Exits Turkey, Mizado, Expands Amazon Clone in Egypt and Morocco (Wamda, 2012-08-26)
7. E-commerce site Zidaya.com has been closed (Sabah Teknokulis, 2012-09-05)
8. The clone brothers at work (Hürriyet, 2015-05-07)
9. Turkish e-commerce sites that closed before Markafoni! Why did the online shopping sites shut down? (Habertürk, 2017-06-02)

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