In 2020, the situation in the Middle East ushered in a great change – the establishment of diplomatic relations between Arab and Israel, and the direct military and political confrontation between the Arab world in the Middle East and Israel has lasted for several years.
However, the normalization of diplomatic relations between Israel and the United Arab Emirates has greatly improved Israel’s long-term tense geopolitical environment in the Middle East. There are also exchanges between the Israeli chamber of Commerce and the Dubai chamber of Commerce, which is good for local economic development. Therefore, many e-commerce platforms also turn their attention to Israel.
We also need to make a brief introduction to the basic information of the Israeli market. There are about 9.3 million people in Israel, and the mobile phone coverage and Internet penetration rate are very high (the Internet penetration rate is 72.5%), cross-border shopping accounts for more than half of the total e-commerce revenue, and 75% of users mainly shop from foreign websites.
Under the catalysis of the epidemic in 2020, the research center statista predicts that the sales of Israeli e-commerce market will reach US $4.6 billion. It is expected to rise to US $8.433 billion by 2025, with a compound annual growth rate of 11.4%.
Israel’s per capita annual income in 2020 is US $43711.9. According to statistics, 53.8% are male users and the remaining 46.2% are women. The dominant user age groups are e-commerce buyers aged 25 to 34 and 18 to 24.
Israelis are enthusiastic users of credit cards, and MasterCard is the most popular. PayPal is becoming more and more popular.
In addition, all taxes shall be exempted for physical goods with a value of no more than $75, and customs duties shall be exempted for goods with a value of no more than $500, but VAT shall still be paid. For example, Amazon must levy VAT on virtual products such as e-books, rather than on physical books priced below $75.
According to the statistics of ecommerce, Israel’s e-commerce market revenue in 2020 was US $5 billion, contributing to the global growth rate of 26% in 2020 with a growth rate of 30%. Revenue from e-commerce continues to increase. New markets continue to emerge, and the existing market also has the potential for further development.
In Israel, express is also very popular with the public. In addition, there are two major e-commerce platforms. One is Amazon, with sales of US $195 million in 2020. In fact, Amazon’s entry into the Israeli market at the end of 2019 has also become a turning point in the Israeli e-commerce market. Second, sheen, with a sales volume of US $151 million in 2020.
At the same time, affected by the epidemic, many Israelis registered on eBay in 2020. During the first blockade, a large number of Israeli sellers registered on eBay and used their time at home to sell old and new goods suitable for use at home, such as toys, video games, musical instruments, card games, etc.
Fashion is the largest market segment in Israel, accounting for 30% of Israel’s e-commerce revenue. Followed by electronics and media, accounting for 26%, toys, hobbies and DIY accounting for 18%, food and personal care accounting for 15%, furniture and electrical appliances, and the rest accounting for 11%.
Zabilo is a local e-commerce platform in Israel, which mainly sells furniture and electrical appliances. It is also one of the fastest growing platforms. In 2020, it achieved sales of about US $6.6 million, an increase of 72% over the previous year. At the same time, third-party merchants occupy a leading value share in E-commerce channels and mainly buy goods from online sellers in China and Brazil.
When Amazon first entered the Israeli market, it required a single order of more than $49 to provide free delivery service, because the Israeli postal service could not handle the number of packages received. It was supposed to be reformed in 2019, either privatized or given more independence, but it was later postponed. However, this rule was soon broken by the epidemic, and Amazon also cancelled this rule. It was based on the epidemic that catalyzed the development of local express companies in Israel.
The logistics part is the pain point of Amazon’s market in Israel. Israeli customs do not know how to deal with a large number of incoming packages. Moreover, Israel post is inefficient and has a high packet loss rate. If the package exceeds a certain size, Israel post will not deliver it and wait for the buyer to pick up the goods. Amazon does not have a local logistics center to store and transport products, Although the delivery is good, it is unstable.
Therefore, Amazon said that the UAE station is open to Israeli buyers and can transport goods from the UAE warehouse to Israel, which is also a solution.
Post time: Aug-04-2021