Amazon Looks for Local Edge In Israel -- WSJ
22 August 2019 - 05:02PM
Dow Jones News
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)
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