Deloitte Consulting conducted a study on the effects of the Covid-19 pandemic on various sectors in Turkey. Based on consumer interactions between mid-January 2020 and the end of March, we wanted to share the results of this study with our visitors. The study provides insights into leading changes during this time frame but does not represent the complete picture.
In this study conducted across 42 categories, it was observed that interaction rates decreased in more than half of the examined categories. In the first weeks of March, the effects of the coronavirus pandemic were not strong in many categories; however, by the third week, more severe changes began to occur. Some categories managed to reverse the situation with effective discount campaigns they conducted during this period.
It is anticipated that categories with increased interactions during the Covid-19 process will naturally recover more quickly than others. The recovery of categories with decreased interactions will not be easy. These categories will likely continue to feel the negative effects of this global pandemic for the remainder of the year.
Initial Negative Effects Were Observed in the Service Sector
The decrease in social interaction among people primarily affected the categories of events and entertainment, culture and arts, transportation, jewelry - accessories, and sexual health products.
There Was a Significant Increase in the Health Products Category
Products that serve as protective measures against the pandemic, such as gloves and masks, as well as herbal products, vitamin medications, and health-supporting products like honey saw a significant increase in demand.
Consumers Spending More Time at Home Had Various Effects
Consumers who distanced themselves from work life and office environments and started working from home began to show more interest in books and online games. As they preferred to handle cooking and cleaning tasks themselves during the pandemic, the interaction of companies delivering food and cleaning services significantly decreased.
During this period, consumers watched more news. They spent more on their children and pets. Demand for consumption products offered in large packages saw a rapid increase. Packaged forms of fast-moving consumer goods such as diapers, toilet paper, detergents, and many others that can be stocked for a longer time were preferred.
A significant decrease was observed in large-scale expenditures such as homes, cars, land, and furniture. Sales of jewelry and accessories, as well as purchases of products from abroad, also decreased significantly.
A Surprising Increase in Interaction Occurred in the Electronics and Clothing - Footwear Categories
Despite the decrease in time spent outside and the increase in risk perception, a significant demand increase was experienced in the clothing and footwear categories in the second half of March, influenced by campaigns. A similar situation was observed in the electronics category. Consumers in this category leaned more towards small household appliances.
Those with Interaction Rates Increasing by Over 50%
Distance Education - Work
The distance education and work category stood out with a 15-fold growth compared to other categories examined in the study on the effects of the Covid-19 pandemic on various sectors in Turkey. It was observed that the fastest development occurred in the Ministry of Education's distance education system, EBA. In this category, increases slowed down in the third week of March, but it is expected to continue in the following times.
National Supermarket Chains
National supermarkets that invested in digitalization, had experience in e-commerce, and had a strong infrastructure in logistics and home delivery experienced nearly a 2-fold increase in interaction during the pandemic. Many consumers who complied with the "Stay Home Turkey" call turned to online grocery shopping.
Supportive Health Products
Demand for health products such as herbal products, vitamins, and honey began to rise at the beginning of March and continued to increase in the last weeks of the month. It is anticipated that the rate of increase in this category will decrease over time.
Hobby Sites
Consumers who spent more time at home during the pandemic showed intense interest in sites producing content on topics such as handicrafts and knitting.
Those with Interaction Rates Increasing Between 30% - 50%
Media
A higher increase was observed in traditional media channels offering written and visual content compared to social media platforms. The increase in interaction in television channels was greater than that in newspapers.
Internet TV
Consumers showed increasing interest in internet TV platforms such as Netflix and BluTV in March. It is expected that the rise in this category, which managed to retain the increasing demand with new content and attractive campaigns, will continue in the coming weeks.
Baby and Children Products
After the third week of March, a significant increase was observed in products such as baby food, children's clothing, diapers, and wet wipes. Demand for large-sized packages of these types of products also increased significantly. However, sales of durable products such as strollers decreased.
Games
Consumers spending more time at home and looking for ways to entertain themselves under these conditions led to a rapid rise in free online local games. While the performance of sites selling console games decreased, demand for games aimed at younger individuals, such as Brawl Stars and PUBG, increased.
Clothing and Footwear
When the coronavirus pandemic came to the forefront in the second week of March, a decrease was observed in the clothing and footwear category. However, due to the effects of discount campaigns, this situation changed in the last two weeks of the month, but it is anticipated that this increase is related to the limitation of social interaction and will not be permanent. Companies that had started e-commerce long ago and established their systems were not negatively affected as much as others.
Pet Products
During this period, consumers stayed at home more, thus spending more time with their pets. This situation increased the interaction of sites selling products such as food, toys, and litter for pets. On the other hand, interaction in the areas of live animal sales and adoptions decreased during the pandemic.
Those with Interaction Rates Increasing Between 10% - 30%
Books
People spending more time at home led to an increase in book sales. It is anticipated that this upward trend in the book category will continue to decrease.
Discount Markets
Discount markets had entered a rapid growth process by increasing the number of stores in recent years. However, during the Covid-19 pandemic, they were not prepared for the rapid shift of consumers to digital channels, and it was observed that their digital interactions decreased, especially between mid-March and the end of March.
Personal Care and Cosmetics
This category was strong at the beginning of March, but a performance decline began in the second week of the month. After the third week, with the emphasis on e-commerce and the effects of campaigns, interaction began to rise rapidly, and this situation continues. Hygiene products and home-oriented consumer products are performing better than cosmetics, and it is anticipated that the gap will widen over time.
Gasoline
At the beginning of March, a global decline in oil prices began. This situation led to a rapid increase in interaction for fuel companies. However, from the third week of March, this speed began to decrease. The stagnation in social and commercial activities may soon cause the interaction in this category to turn negative.
Underwear
The increase in this category was lower compared to clothing and footwear.
Those with Interaction Rates Decreasing Between 0% - 10%
Social Media
Social media platforms, which have three times higher interaction than traditional media channels, did not experience a significant increase during the pandemic. It was observed that Twitter was in a better position compared to other channels in this regard.
Electronics
The decrease experienced in this category in the first weeks of March turned positive in the third and fourth weeks due to discount campaigns, the needs of couples preparing for marriage, and the impact of currency increases. The largest increase was observed in the small household appliances segment. If the effects of the pandemic increase, it is anticipated that the situation may turn negative.
Home Goods and Building Materials
During the pandemic, consumers did not make significant changes such as renewing furniture in their homes and instead turned to decorative accessories and small-scale changes. The prolongation of the pandemic process may lead to a negative turn in this trend.
Those with Interaction Rates Decreasing by 50% or More
Home Services
The study on the effects of the Covid-19 pandemic on different categories in Turkey showed that interaction in platforms providing services such as home cleaning, repair, and transportation significantly decreased after mid-March. It is estimated that consumers postponed such needs to act economically and to protect themselves from the risk of disease transmission. This negative trend seems likely to continue throughout the pandemic.
Health
The spread of the pandemic led to a regular decrease in consumers' tendency to make appointments in public and to seek private hospitals. It was observed that the decrease in private health institutions was lower than in public ones. It is anticipated that this negative effect will continue to slow down.
Jewelry and Accessories
Consumer demand for luxury consumption items such as jewelry and accessories began to decline from the beginning of March. It is anticipated that this decline will continue in the future and that companies in this category will take much longer to recover compared to companies in other categories.
Culture and Cinema
The study on the economic effects of the Covid-19 pandemic in Turkey showed that the sharp decline that began at the beginning of March in the culture and arts category, such as cinema, theater, and concerts, continued in the following weeks before protective measures were taken. It was observed that consumer interaction in this category decreased by 95% compared to January, and it is anticipated that this negative trend will continue.
Hotels and Accommodation
Due to the effects of the pandemic, domestic and international holiday and accommodation activities began to slow down in March. This decline continued rapidly in the following weeks. It is anticipated that the negative trend in the hotel and accommodation category will continue in the future.
Car Rental
The negative effects of the pandemic on trade and accommodation also reflected in the car rental sector. It is anticipated that this situation will continue as long as social and commercial conditions do not change.
Other Transportation
Consumer interaction in categories such as bus, railway, and maritime transport, excluding air transport, followed a fluctuating course. A decline was observed in this category in the first week of March, which increased in the second week, and a significant decrease in interaction was seen, especially in the last week of March. It is thought that the negative trend in the sector will increase over time.
Sports Media
Sports media entered a more serious downward trend than other media categories due to the cancellation of leagues in Turkey and Europe. It is anticipated that this negative trend will continue unless different and creative content is produced.
Betting
A sharp decline was also observed in betting sites, similar to sports media. When the leagues in Turkey and Europe were canceled, these sites tried to maintain interaction by highlighting foreign leagues and different branches. The cessation of these activities may lead to an increase in the downward trend in betting sites.
Those with Interaction Rates Decreasing Between 30% - 50%
Real Estate Sector
The increase in consumers' risk perception led to a gradual decrease in interaction for sites renting and selling homes, land, and workplaces starting from the beginning of March. It is anticipated that this negative trend in the real estate category will continue in the future.
Automobile
A sharper decline was observed in sites selling automobiles during the same period compared to the real estate category, and it is anticipated that this situation will continue.
Aviation
After the interruption of education, a significant decrease was observed in the interaction of airline companies and ticket comparison platforms. The negative trend, which started lightly at the beginning of March and followed an irregular course in the following weeks, turned into a sharp decline in the last week of the month. Considering the current travel restrictions, it seems that this situation will continue.
Food Delivery
Due to the effects of the pandemic, people are spending more time at home, and many employees have started working from home. Demand for food delivery platforms and national fast-food restaurant chains began to decrease during the pandemic. This decline is thought to be related to hygiene concerns, consumers looking for things to do at home, and the need for savings.
International Marketplaces
In the last weeks of March, it was observed that consumer demands for international marketplaces significantly decreased regardless of the country. A parallel decline in imports can be expected in the coming months.
Career
The slowdown in trade life caused the interaction of job and employee search platforms to start decreasing at the beginning of March and to drop sharply in the second half of the month. It is anticipated that this negative situation will continue.
Other Corporate Services
The Covid-19 pandemic also showed one of its negative economic effects on insurance, tax, tender, and B2B portal interactions. The interaction of companies in this category providing services in areas such as e-commerce consulting and digital payment systems followed a positive trend due to the influence of companies trying to quickly shift from physical trade to e-commerce. However, this situation was not enough to eliminate the strong negative impact observed across the category.
Sexual Health Products
The decrease in social interaction during the pandemic led to a decline in demand for condoms and other sexual health products. It is anticipated that this negative trend will continue in this category.
Those with Interaction Rates Decreasing Between 10% - 20%
Furniture
During the pandemic, it was not unexpected for consumer demand for durable goods to decrease due to the increase in risk perception. The furniture sector also suffered from this downward trend. If the pandemic further affects consumer expectations, this decline may continue.
Sports Shopping
No increase in interaction was observed in the sports shopping category, similar to clothing and footwear. Despite the positive effects of campaigns conducted in the last weeks of March, it was observed that the performance in this category is still lower than in January.
Marketplaces
In marketplace-style sites, many companies sell products in different categories. The interaction of these types of sites during the pandemic varied significantly according to the subcategories they featured. Sites that focused on durable consumer goods such as home, car, and furniture were more negatively affected. Sites that emphasized daily household items, clothing, and footwear, and provided their own distribution services experienced a softer decline in interaction.
Public
The slowdown in social and commercial activities and the reduction of some public services led to a decrease in the interaction of public service platforms, especially e-government. It was observed that the Ministries of Health and Education were not affected by the pandemic like other institutions.
Banking Sector
The impact of the pandemic on all banks was not the same. However, as a natural consequence of the slowdown in commercial activities, the interactions of the banking sector began to decrease, especially between mid-March and the end of March.
Cargo Services
The declining performance of marketplaces and the activation of companies' own logistics capabilities led to a lesser increase in interaction for cargo companies. It was observed that small-scale firms were less affected compared to larger ones. The negative trend accelerated in the last weeks of March and is expected to continue in this manner.
Educational Institutions
The interruption of schools and universities at the beginning of March led to a decrease in the interaction of private and public educational institutions at different levels. This decline was compensated in the last weeks of the month. It was observed that the performance of universities was lower than that of K12 institutions. With the widespread implementation of distance education, it is anticipated that there will be a strong positive movement in public and private educational institutions.
Aggressive Discount Campaigns and Other Advantages
In the first half of March, a decline in demand was experienced for most consumer products other than food items. The attractive opportunities such as large discount campaigns launched from the third week, change guarantees, and free delivery changed this situation.
Consumer Pivot
Companies providing corporate services and selling products managed to avoid a sharp decline in consumer interaction through some practices. Companies that implemented promotions related to products used as precautions against the Covid-19 pandemic, such as masks and disinfectants, as well as offering some consumer products in large packages and highlighting fast-moving consumer products in multi-category marketplaces received positive responses. Companies that shifted from professional customers to individual consumers were also able to prevent interaction loss. It was also observed that companies experiencing a sharp decline in demand implemented practices such as free content and webinars to avoid being forgotten by consumers.
Hygiene in Delivery
During the pandemic process, consumers experienced concerns about hygiene and determined many of their behaviors and preferences accordingly. Companies that offered products packaged without contact with clean materials, ensured that delivery personnel took protective measures, cleaned delivery vehicles daily, and paid attention to similar matters were able to reduce consumers' concerns in this regard.
Care for Order Tracking and Delivery Processes
During this period, e-commerce entered a rapid upward trend. Companies that were not prepared for this and could not manage order tracking and delivery processes well lost customers, while those that had fully digitized these processes or received support in this area performed better. Companies that established their own distribution networks and invested in their teams to eliminate the problems experienced during peak sales periods received positive responses during the pandemic.
Positive Effects of Early Digitalization
Companies that took into account the trend of e-commerce and digitalization and made early investments in this area received returns on their investments during the pandemic process.
(Source: Study by the Deloitte Consulting team)
Health and Life
