For the last two months, I have been attending meetings with foreign brand representatives and diplomatic representatives residing in Turkey and I’m glad to say that these top-level meeting have been quite mutually beneficial.
Diplomatic representatives do not ask many questions, except for Turkish economy. Their job is to work to maintain bilateral of trade and trade relations. On the other hand, multinational companies and global brands are curious to know two important things:
- What will happen to High Exchange Rates and High Inflation in Turkey?
- When will the election be held and who will emerge victorious?
In the meantime, with the disruptions in the supply chain, they wonder whether the additional export profit that Turkey made due to its proximity to Europe will be a permanent trend or not.
Frankly, the concept of “quality products and cheap labour” belonged to the 1990s. Unfortunately, we are in the same situation today and brands are wondering if they should Turkey as a production base or they will have to shift their production to another location. Another sad fact is that even if these brands choosing Turkey for low-cost production will not help products being sold at lower prices. Because every brand has a price strategy, they can neither lower their prices nor increase them.
“Can Cheap Labour Help Us in Any Way?”
All the brands and companies of the world continue their business by determining their prices according to their competitors, no matter how much they dominate their own markets. They maintain a planning that focuses on all “end-to-end” processes, including to capacity, supply, energy, logistics and finance, and even the legal systems of countries. Rather than whether the regime is democratic or totalitarian, they care about not having to deal with too many people, too many or vague bureaucratic hurdles when a problem arises. That is the reason why they are curious about the outcomes of the elections.
Global brands in Turkey heavily object to child labour, environmental pollution, bribery, abuse, etc. Besides financial matters, they seem to be more interested in such issues. Because their stock value declined sharply due to negative news and their senior executives had to resign, they created special departments that deal with such issues and ensure that the brand does not get involved in them.
In short, it is understood that although they are going through some difficult times, global brands operating in Turkey are examining the country with a focus on possible costs. They are also hesitant about election scenarios, and they are quite concerned about ever increasing inflation and exchange rates. However, they still do not give up on Turkey. This cannot be ignored.