Amazon struggles to win Israeli shoppers while Chinese e-commerce giants dominate
And it's not because it hasn't tried. In April 2019, Amazon reached out to Israeli sellers and invited them to join the Local Delivery program.
Amazon faces challenges in establishing a successful online retail presence in Israel, despite its global growth. According to Shop Analytics data in June 2026, Chinese platforms AliExpress, Temu, and Shein collectively captured about 75% of Israeli online orders, while Amazon held only a 6% market share. Nir Zigdon, an e-commerce expert and CEO of ECommunity, noted that Amazon's struggles are not due to a lack of effort; instead, Amazon failed to set up its own logistics center in Israel.
Sellers were required to manage inventory and delivery independently, which proved difficult in a small and competitive market. Zigdon emphasized that marketplace success hinges on offering something challenging for suppliers to achieve alone, such as an extensive customer base, efficient logistics, and trust that supports higher prices.
In a small market like Israel, additional commissions may deter consumers from purchasing from Amazon rather than the original seller. Compared to Amazon's partial presence in Israel, AliExpress's investment in a local logistics arm, Parcel Home, and local warehouses stands out. These efforts have allowed AliExpress to achieve shorter shipping times and provide customers with convenient pickup options.
The primary hindrance to Amazon's success in Israel, according to Zigdon, is the platform's lack of physical presence and advertising. In contrast, large Israeli retailers like Azrieli, Melisron, and Shufersal faced closure due to high investments in marketing, technology, and logistics without sufficient returns. The marketplace model requires economies of scale, which is challenging to achieve in a small market like Israel.
Zigdon's research suggests that the Israeli market may not be suitable for a general marketplace in its classic form. Instead, successful Israeli retailers like KSP, SuperPharm, and Shufersal have expanded their offerings while maintaining their specific retail operations, much like Zigdon's suggestion that platforms like Amazon must bring unique value to justify their presence in the Israeli market.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
