Given the large and hopeful demands by Israeli consumers, Amazon is considering setting up a shipping center in Israel. The online retail giant has numerous teams on site, both Israeli and international, to scope the logistics of what this would mean. A real estate team is inquiring about possible warehouse locations, and a shipping center in Modi’in might be in the works.
Another team has been monitoring Israeli shopping habits. Most Amazon deliveries come in from the United States, United Kingdom and Germany. The largest challenge for Israelis is the high delivery fees and lengthy shipping times, which mean higher product prices and products which can take weeks to arrive instead of days.
Israeli consumers suffer due to exponentially higher domestic prices, and the numbers show that they have begun to take their online shopping to the next level. This year, the Israeli consumer market is expected to spend over $4 billion dollars in online purchases, showing an increase of about 18% per year for the past 3 years consistently. They have taken to ordering products, from baby goods to technology products, online. Both types of products can cost up to four times more in Israel than they do online.
While there is no doubt the Israeli consumer is ecstatic about the prospects of less expensive goods and home delivery, the Israeli local retailers, and the Tax Authority are the ones who may lose big.