Germany’s Rocket Internet may be a juggernaut, but it’s not incapable of veering off-course from time to time. That’s what seems to have happened in Turkey, a fast-growing but fiercely competitive market from which the Samwer brothers are withdrawing, according to multiple reports.
Rumors had been brewing for a few days, but on Friday the Turkish site Webrazzi reported that Rocket was closing down its Istanbul offices, laying off hundreds of workers and looking to close or sell off its Turkish sites. That was followed by several other reports quoting Rocket execs that confirmed the move.
I’ve asked Rocket for direct confirmation but, perhaps unsurprisingly, have not yet heard back. For the record, those properties — still listed on Rocket’s corporate site — are Eleseri (jewellery), Evimister (homewares), Sporena (sports apparel), Zidaya (clothing), and a local branch of the Westwing home and living shopping club.
But wait: Turkey is one of the fastest-growing economies in the world, so why is Rocket withdrawing?
According to a source quoted by Venture Village, the margins were just too low. If that’s the case, Rocket clearly doesn’t hang around when it comes to evaluating a likely failure — GoDaddy’s records suggest the domain for Zadaya, a Turkish equivalent to Rocket’s hugely successful Zalando, was only registered this February.
Then again, the Samwers’ operations tend to have a reputation for almost capricious hiring and firing. For recent evidence, I’d recommend reading a blog post written by a disgruntled employee in the Philippines last week (warning: contains the phrase “everything was like a Hitler-decision”, which is unlikely to go down well with German employers) .
Whatever the reason for Rocket sailing off into the sunset, it represents something of a blow for the Samwers’ reputation as kings of internationalization – it seems they can’t do it all, after all.
Maybe that’s why Rocket has joined hands with Millicom for its expansion into Latin America and Africa: if they’re going to set up as quickly as possible, as is the Samwer way, they now see the benefit of teaming up with someone that has the local knowledge they lack.
Still, it’s not all bad news for Rocket. When they do it right, they really do it right. Just look at JP Morgan’s investment in Zalando yesterday – Rocket’s successes are now attracting the attention of the biggest names in the business.
And that, after all, is the game Rocket’s playing with its myriad clones. Set up quickly, cut your losses quickly, focus on the wins. Rake in the millions. And repeat.