Despite its modest population (8.2 million), Israel is an interesting e-commerce market. This is especially true from a cross-border perspective and is due to certain domestic circumstances.
The number of Israeli businesses selling online are few – with prices that are usually substantially higher than those of cross-border retailers. This is because of high value-added taxes (VAT) as well as monopolies on numerous consumer goods. Nearly 80% of Israeli online shoppers have bought products from abroad, predominantly from China, the UK and the US.
High Growth Projections
Between 2009 and 2014, e-commerce in Israel showed a compound annual growth rate (CAGR) of close to 25% which was more than double the global growth rate. E-commerce revenue in Israel is forecasted to reach USD 3.6 billion in 2016 and rise to USD 4.9 billion in 2020.
Israel is a fairly-digitalized country with a 75% Internet penetration and a smartphone market of over 60%. The dominant e-commerce categories in Israel are Home Electronics, Fashion & Footwear and Media Products. Housewares and groceries are also popular to buy online.
Israel’s official languages are Hebrew and Arabic. However, a clear majority of the population speaks and reads English. Communicating in Hebrew or Arabic is not considered necessary.
Delivery and Payment Options
The Israeli Post has around 1,000 service points for consumers who choose to pick up their online purchases. There are also a number of companies offering home delivery as well.
A majority of Israeli online consumers prefer to pay for their purchases by credit or debit card. The second most popular payment method is e-wallet services such as PayPal.
Population: 8.2 million
Languages: Hebrew, Arabic, English
Currency: Shekel (NIS)
GDP: USD 286 billion
Internet Penetration: 75%
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