By Dov Lieber 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 22, 2019).

TEL AVIV -- Amazon.com Inc. is seeking new vendors in Israel to bolster its service in the country, a move that comes as the e-commerce company prepares to launch a local-language website to tap the fast-growing Middle East market.

The company reached out to businesses in Israel to sell and directly deliver locally via its platform, according to a statement on its website Wednesday.

For years, most Israeli companies that have sold products on Amazon first sent their goods to fulfillment centers in the U.S. and Europe. This has made the products more expensive for Israeli buyers. Now Amazon is working to ensure that these goods can be sold directly from inside the country.

Amazon said that its aim is "to provide our customers in Israel with even more local products to choose from," with quicker delivery speeds.

The program will eventually help Amazon in its planned launch of a Hebrew-language website aimed specifically at the Israeli market, according to people familiar with the company's plans.

Amazon was planning a major drive to reach out to Israeli buyers before the Jewish holiday season in October, but a surprise second national election this year -- in September -- may force the company to push off the campaign, they said.

A spokesman for Amazon declined to comment on the company's plan for a local-language website.

Amazon's move in Israel marks its second big effort in the Middle East this year. In May it opened its first-ever Amazon-branded Arabic-language website in the United Arab Emirates.

While it is a relatively small country of about nine million people, Israel has a strong record of online shopping. Last year, the Israeli postal company said it handled 65 million packages from abroad. China's Ali Express, owned by Alibaba Group Holding Ltd., led the Israeli market with 50% of the orders, followed by eBay Inc. and Amazon, the Israeli postal service said. Malls still remain a central pillar of Israeli shopping culture, but e-commerce is expanding at a fast clip. Analysts estimate the current Israeli e-commerce market at about $4.8 billion in sales, 70% of which goes to companies outside Israel.

Nir Zigdon, chief executive of eCommunity, an e-commerce company helping large Israeli and foreign companies open Amazon shops, said the largely traditional retail market in Israel has been rushing to prepare.

"The market has been boiling since May," he said. Amazon first approached the Israeli market in May by sending a letter in Hebrew letter to potential sellers.

With its new focus on the Israeli market, Amazon faces potentially difficult decisions about marketing goods that are produced in Israeli settlements as being made in Israel. Some Palestinians and their supporters have called on companies to make sure they aren't profiting from Israel's contested presence in the West Bank and demand any Israeli products made there be clearly labeled as made in the settlements rather than Israel proper.

A spokesman for Amazon declined to comment on the issue.

"Any relationship whatsoever with the settlements will make them a target for the BDS movement and maybe the Palestinian government," said Sam Bahour, a Palestinian-American business consultant living in Ramallah. He was referring to the international movement to end Israel's occupation of the Palestinian territories through boycotts, divestment and sanctions.

Gil Dattner, an analyst with Bank Leumi, when asked about the challenges Amazon might have regarding the conflict with the Palestinians, said the company would have a hard time not providing service to all Israelis, including those living in West Bank settlements, but said the company would be able to handle the pushback.

"To a large degree, what Amazon is doing is allowing Israelis to service local Israelis better," he said.

Amazon also is offering international retailers the option of keeping their products in Israel and selling to Israelis through a supplier of their choice, as long as they can deliver within three to five days, or faster.

Amazon, in an email sent to potential sellers in Israel, said Israeli buyers would be informed whether a product was sold locally, allowing for better user experience and adding more traffic to Israeli-based sellers. The company said this feature would be available soon.

In a Hebrew announcement on its website, Amazon recommended that Israeli sellers send their products to fulfillment centers in the U.S., where Amazon would handle the entire shipping process to international customers.

Write to Dov Lieber at dov.lieber@wsj.com

 

(END) Dow Jones Newswires

August 22, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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