Amazon and Shein are winning over the Israeli ecommerce market

Image: Fotolia

Image: Fotolia

The RetailX Israel 2022: Ecommerce Country Report equips multichannel and ecommerce merchants with industry insight into Israel, a country that is a world leader in so many digital technologies.

A big surprise as an outsider looking in has been to see the degree to which foreign retailers exert such a big influence on the Israeli market.

Digital Editor, Scarlette Isaac, looks at the most successful sellers that are impressing consumers in this advanced economy.

Shoppers in Israel often turn to amazon.com and other non-Israeli retailers when they are shopping online. Whenever retailers consider expanding into new territories, one major concern is often whether consumers’ inherent bias towards familiar domestic names will prove difficult to overcome. In this context, the figures surrounding web traffic in Israel are reassuring because they reveal a market where consumers are happy to shop abroad.

Look at analysis of the leading retailers in the Israeli market for 2020 by net sales and familiar international names are high on the list, including amazon.com, Asos, Zara and Nike. Companies based in the United States and China lead the way, although it’s worth noting the figures shown here for web traffic from different countries are skewed by so many retailers popular with Israeli customers being based abroad. Topping the list of leading retailers in the country, amazon.com had revenues of $195m in Israel in 2020 and is growing at around 20% per annum. Amazon has yet to launch an Israel-specific site.

Instead, it has pursued a different strategy. The retail behemoth’s popularity can be partly explained by the way Amazon has sought to drive sales via its delivery offering. In 2018, it included Israel in a list of international destinations in which it offered free delivery, albeit on a limited number of products and for orders of more than $80. In 2019, this amount dropped to $49. While free shipping was suspended during the pandemic, it has now been introduced for orders of more than $65, although consumers are still liable to pay import taxes.

These shifting figures help explain why being clear about the price of delivery is such an issue for Israeli consumers: buying from abroad, they already potentially have to do relatively complicated maths just to calculate how much any item will cost.

The second-largest retailer in Israel by sales is Shein. The Chinese-owned fast fashion retailer was established in 2008 and now sells across Europe, North America, Australia and the Middle East. Its revenues in Israel were $151m in 2020. Over these years, often enjoying 100% year-on-year growth, Shein has grown to be the world’s largest fashion company, measured by sales of its own-brand goods.

Shein has turbocharged the fast-fashion model and has become something of a cult retailer in the process. Shein’s popularity in Israel once again shows how a large subset of consumers in the country is international in its outlook. However, Shein is not a typical Chinese retailer in that it does not sell in its own home country, where Alibaba offers daunting competition, but has instead expanded solely in foreign markets.

Since the publication of the Israel 2022 report, Shein has taken the crown – generating a revenue of $244 million in 2021. This makes it the biggest ecommerce company in Israel, overtaking Amazon ($130 million) on its way to the top.

To find out more about the largest 100 retailers selling in Israel, as well as gain insight into customer demands, best-selling products and delivery expectations, download the full report here.

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