In recent years, businesses both domestically and internationally have been concerned about the state of the Turkish economy. A difficult business environment has been caused by in a number of issues, including political instability, national currency devaluation, and high rates of inflation. The economic volatility that has beset Turkey is a major factor in the exodus of businesses from the market. Businesses are finding it harder and harder to earn a profit due to increased manufacturing costs, unstable Turkish currency, and high rates of inflation. For instance, in recent years, the Turkish lira's value relative to the US dollar has dropped drastically, increasing expenses for companies that import goods and raw materials.
Consequently, a number of businesses have chosen to withdraw from the Turkish market. The most recent businesses to make this decision were Steam and Pringles. Now let’s dive into these specific cases.
Steam’s Local-Regional Pricing Policy
Before we start, it is important to define what “regional pricing” is. It signifies the fluidity in the price of a product depending on the region. Factors such as local currency, inflation, and taxes constitute the main components of most regional pricing policies. By November 20th 2023, Steam, the renowned online gaming market, is set to get rid of its regional pricing policies in Türkiye and Argentina, two countries that have been economically struggling for the past decade. This means that Steam will no longer accepting Turkish lira or Argentinian peso as a form of payment. Users in these countries will still be able to use and purchase from Steam, they will be disadvantaged concerning their budget. Steam has stated that it made this decision because “exchange rate volatility in Argentina and Turkey in recent years has made it hard for game developers to choose appropriate prices for their games and keep them current.”
Although Steam seems to be concerned for the revenue of game developers, they also faced user backlash from Türkiye. Turkish gamers have complained that purchasing games in USD would not be affordable and sustainable for their budget. Although Steam has not completely left the Turkish market, the future of some businesses in the country remains blurred.
Companies leaving the Turkish market may have detrimental effects on the economy. It can weaken the general business climate, discourage foreign direct investment, and delay economic progress. Additionally, it may cause consumers to become cautious about the future and reduce their spending, which would lower domestic demand. This would have an impact on consumer confidence. The Turkish market presents a variety of hurdles to firms, all of which must be addressed if Türkiye is to continue to draw in new investment.