Israeli population averaged 2 online orders per second in 2017

In bid to beat high prices in Israel, shoppers bought 61 million packages over the internet, up 15% from the previous year, says Israel Postal Company

Sue Surkes is The Times of Israel's environment reporter

Illustrative image of online shopping. (Poike, via iStock by Getty Images)
Illustrative image of online shopping. (Poike, via iStock by Getty Images)

Israelis as a nation averaged two online orders per second during 2017, according to data from the Israel Postal Company, as they stepped up their online shopping habits in a bid to beat Israel’s high prices.

They clicked and bought a record-breaking 61 million packages, 15 percent more than in 2016, representing a combined weight of 10,800 tons, the business daily, The Marker reported Sunday.

Clothing and shoes, homeware, accessories, gadgets, vitamins and cosmetics topped the Israeli shopping list.

The most popular sites, as in previous years, were China’s Ali Express, Asus, eBay, Next and Amazon, with Ali Express taking half of all Israeli orders.

New on the list of popular companies last year was Book Depository and the vitamin site, iHerb.

A postal service sorting hall in Tel Aviv.(Yossi Zeleger/Flash 90)

The busiest buyers online came from the northern town of Karmiel, where citizens ordered an average of 3.4 packages each during the year, translating into a total of 163,000 deliveries.

In second place came the southern city of Kiryat Gat with 172,000 orders. Rishon Lezion, in the center of the country, moved down from first position in 2016 to third last year, with 783,000 orders.

The data relates solely to orders which entered Israel by post. They do not take account of deliveries by courier companies such as DHL-I, GCX and UPS.

GCX on Sunday reported a 50% increase in Israeli online orders in 2017, worth some NIS $28 million, compared with 2016, The Marker said.

In September, the Israel Postal Company opened a special center for online trade in the city of Modiin, between Jerusalem and Tel Aviv, hoping to reduce the percentage of justified customer service complaints, which in 2016 stood at 72.5%, according to the ombudsman’s office.

Israel Postal Company CEO Danny Goldstein told The Marker that the new center would be able to sort more than 100 million items annually.

He added that 430 distribution centers for parcels and recorded mail were opened in 2017, in addition to the 700 existing ones.

In November, the Calcalist business daily reported that Amazon was preparing to launch retail sales activities in Israel and was in negotiations to rent 25,000 square meters (260,000 sq. ft.) of storage space in central Israel to provide the local market with products.

Boxes moving along a conveyor belt at an Amazon fulfillment center in Tracy, California, January 19, 2015. (File: AFP PHOTO / GETTY IMAGES NORTH AMERICA / JUSTIN SULLIVAN)

This would significantly reduce prices. At present, products from Amazon make their way to Israel from Germany, the UK and sometimes from the US, which means relatively high shipping prices and long delivery times.

Even if Israel is a small market — with just eight million citizens — the country is an OECD leader in online acquisitions per capita, according to data released by PayPal. Israelis spent some NIS 11.8 billion ($3.4 billion) in internet spending in 2016, and were forecast to have spent some NIS 14 billion in 2017, Calcalist said. That is because many items acquired online are cheaper than the same bought in Israel, where living costs are high.

What makes online purchases more expensive is the delivery costs and taxes. Israelis are exempt from Value Added Tax (VAT) for imports that cost up to $75 dollars, and from custom taxes for acquisitions up to $500.

Local consumer groups, the Israel Postal Company and foreign online stores have been recently lobbying the government to raise the exemption ceiling to lower the cost of living locally, Calcalist said.

A December report by the Taub Center showed that price levels in Israel are the highest in the OECD.

Israel’s price index was 23 percent higher than the average of countries in the Organization for Economic Cooperation and Development, a club of developed or developing countries, including rich Western nations such as the US, France, Germany and Luxembourg.

Only Switzerland, Iceland, Norway, Denmark, Australia and New Zealand had higher price indices, according to the data.

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