Building the ‘Israeli Amazon’

A first-of-its-kind conference reveals some interesting facts about Israelis’ online buying habits

Clothing, shoes and accessories are on display for sale at a branch of the Castro clothing chain (Photo credit: Flash90)
Clothing, shoes and accessories are on display for sale at a branch of the Castro clothing chain (Photo credit: Flash90)

Most people don’t realize it, but Israel is one of the world’s hottest spots for online buying. Over 80 percent of Israelis bought something online last year, more than in any European country — and they spent more, too.

All this without an Israeli version of, by far the largest e-commerce site in the world. So where are Israelis spending their money? In China, said Efi Dahan, regional Israel and Africa manager for online payment transfer company Paypal. Israel, he said, is one of the top 10 countries in the world in transferring money for Internet purchases to China. Israelis, it seems, don’t buy much on Israeli websites.

But it’s not because they’re unpatriotic; just the opposite, in fact. According to a study cited by Dahan, Israelis would be more than happy to buy from local online sites — and are willing to pay a premium to do so. Seventy percent of Israelis, according to this study, would be willing to spend up to 5% more for a product if they could buy it from a Hebrew-language site.

All that remains, then, is for Israeli retailers to open online stores, start selling, and rake in the dough. Ah, but how do you go about successfully marketing on the Internet — getting people to break their online shopping habits and lose their bookmarks to their favorite Chinese retail sites, replacing them with bookmarks for Israeli sites?

That was the big question at Go E-Commerce, the first-ever conference dedicated to online retailing in Israel. The event brought together a who’s who of e-commerce, including, among others, Paypal’s Dahan; Nir Lampert of online price comparison site Zap; Assaf Ben-Dov, chairman of Hamashbir Lazarchan department stores; Yuval Krazhevsky, inventor and CEO of Groupon Israel; and owners or representatives of a host of small-time mom n’ pop e-commerce sites.

If Israelis buy so much online, why are there so few successful Israeli e-commerce site – and where is the “Israeli Amazon”? Many companies thought that they were building just that, only to fall flat on their faces, speakers at the event said. Most failed because they didn’t understand e-commerce – what kind of promotions work online vs. the ones that are more successful in regular retailing, how to advertise online, how to compete not just against the store down the block, but essentially against the world, and more. “It takes a special kind of of Israeli chutzpah to get involved in a whole new retailing medium without really knowing what you’re doing, and to expect to succeed,” one speaker said.

Speakers representing major websites and large retail chains, including the Hamashbir Lazarchan CEO, promised websites next year. Tips and ideas on how to successfully sell online were exchanged during workshops at the event, as well as what makes online retailing different than “brick and mortar” sales.

“E-commerce is undergoing a revolution in Israel,” said Ben-Dov of Hamashbir. “It’s still sputtering a bit in Israel, but I believe we are on the right path. Unfortunately, over the past five years, more sites have shut down than have opened, after a rush for retailers to get online. It’s just a matter of doing it professionally, and doing it right.”

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