Like other countries in the world, the cost of living for Israelis is on the rise. Due to the high cost of living, Israelis have started online shopping, saving money by comparing product prices online and buying cost-effective products. The continued development of the Israeli e-commerce market is also attracting platforms such as Amazon and AliExpress.
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The Amazon executive delegation will meet with Israel’s biggest fashion and electronics importers this week to determine the conditions under which they sell their products on Amazon’s website, according to Israeli financial newspaper Calcalist.
The Amazon executive delegation arrived in Israel in Sunday and held meetings with local businesses. The focus of the meeting was to agree on the costs for local businesses to enter Amazon.
Amazon is understood to be preparing to do business in Israel and to engage with local retailers to invite them for the first time to its sales website dedicated to Israeli businesses. Amazon requires Israeli retailers to ship their products to customers within five business days. As Calcalist points out, Amazon does not yet have a logistics hub in Israel, and merchants selling through Israeli sites will use their own warehouses.
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Amazon had been rumored to be planning to rent a large storage space in Israel to provide products to local consumers.
Currently, Israeli consumers buy products on Amazon, most of which need to be sent from the UK, Germany or the United States, meaning Israeli consumers have to wait a very long time and transport costs are high. Once Amazon opens a warehouse in Israel, the freight paid by Israeli consumers on Amazon to buy products will plummet, which will encourage more Israeli consumers to shop on its website.
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For now, Amazon has yet to find the right place to open a warehouse, so it will use the merchants ‘ own warehouses sold at Israeli sites. With the talks, Israeli consumers are expected to make faster deliveries of local goods.
According to Israel Post, Israel generated an average of 2 online orders per second in 2017, a total of 61 million parcels nationwide, an increase of 15% over 2016. Footwear, household items, accessories, gadgets, vitamins and makeup products topped the list of online purchases by Israeli consumers.
The Israeli city of Carmel (Karmiel) is known to be the most concentrated place for online shopping, with the city receiving an average of 3.4 parcels per person a year, with a total of 163,000 parcels delivered to the city. Professionals believe that online shopping trend in Israel will continue to grow. TASC, a strategy consultancy, estimates that online shopping in Israel will at least double by 2020, with annual spending exceeding 15 billion shekels ($3.85 billion).
When it comes to online payments, Israelis are keen to use Visa, MasterCard, and Israel’s native payment methods of Isracard, which account for up to 77% per cent. In addition, Paypal’s local penetration rate is also increasing.
Currently, the main e-commerce platforms in Israel are:
1, AliExpress
2, Shufersal Yashir
3, eBay Israel
4, Walla! Shops
5, GetIt
6, P1000
7, Next
8, Amazon
In addition, Amazon plans to provide incentive programs to large U.S. content publishers, such as The New York Times and BuzzFeed, to push them to expand into overseas markets, according to people familiar with the news. Currently, publishers are paid when consumers click on links to amazon on the site and end up with shopping.