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Ecommerce Report: Israel

Hello there ecommerce folks! Today we are going to take a look at the ecommerce market in Israel, a country with more than 8.3 million people and a GDP of 296.075 million according to the World Bank.

In comparison with other countries that we have analyzed previously these stats may seem small. However, as it happened with the Dutch market, the interest doesn’t come from the size of the market, but from its particularities.

After suffering in the financial crisis as almost all countries in the world, the Israeli economy is in good shape now. OECD forecasts a growth rate of 3.32% for 2016 and 3.41% for 2017. The World Bank categorizes it as a high income level country.

Regarding internet access, OECD estimates 70.6% of households have it, so there are still things to do in this aspect, but it also means that ecommerce has a great growth potential.

Actually, the market is not even in the maturity period of the cycle yet. Internet Retailer informed us this year about how Israeli online buyers suffer from long waiting periods because of delivery when buying from business from their own country.

Citizens are ready to buy, though. Following The Jerusalem Post, 74% Israelis bought something online in 2016, with an estimated worth of NIS 11.8 billion (€ 2.91 billion) which is an interesting growth of 18% from the previous year.

So how do Israelis buy?

Again, we can get the information from The Jerusalem Post article: Israelis are not very different from other online buyers. They are starting to discover the benefit of buying from mobile and more than that, they are starting to demand an omnichannel experience. When it comes to downsides, one of the most important is delivery cost. 46% of them canceled a transaction because of high delivery costs. They are not afraid to buy overseas and when they do so, the preferred payment method is PayPal.

According to the Internet Retailer article mentioned before a PayPal-Ipsos study stated that 79% of Israeli buyers bought overseas, with China as their preferred seller origin. As a matter of fact, following GoEcommerce data, Chinese importance is surprisingly high, since 85% of online buyers buy in Chinese ecommerce sites.

If you are wondering what sort of products they buy, Statista offers us the answer. The most popular products for Israeli online purchases are: Electronics, toys and fashion, followed, but with much less importance by food and personal care and furniture.

Some popular ecommerce sites are:

In addition to these, Israelis use international sites including Groupon, Amazon, Alibaba and eBay.

Events to keep you informed about ecommerce trends in Israel:

Other interesting facts

  • Official language is Hebrew
  • Is the only Jewish country in the world
  • Jerusalem is the capital and the largest city
  • The currency is Israel’s new shekel, known as ILS and formerly known as NIS

Conclusion

The country it is well-known internationally because of its start ups and great technology. However, it seems it has a problem with its national ecommerce businesses. We are sure that once they decide to take the step to go into ecommerce seriously, Israeli companies will offer something awesome, but in the meantime it is a nice niche market for businesses that are able to provide good user experiences, especially in aspects related to delivery, where it seems they have their main problem as you can see here and here due to the inability of the Israel Post to achieve to satisfy the needs of ecommerce.

Israelis are savvy buyers. They have high expectative when buying online, and if they can’t find what they are looking for in a reasonable time or at a reasonable price, they can find a solution overseas. This indicates the market is ready to enter into maturity as soon as the infrastructure allows.

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