While Amazon goes from strength to strength worldwide, the US giant has struggled to gain a foothold in Israel in terms of online retail sales. Shop Analytics data in June 2026 shows that the three Chinese platforms AliExpress, Temu and Shein accounted for about 75% of Israelis’ online orders, while Amazon only had a 6% market share.
E=commerce expert and ECommunity CEO Nir Zigdon says, "It’s interesting, because in other countries Amazon is a very significant player, and here it hasn’t been able to create the same traction. 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. The idea was to allow suppliers to present products to Israelis through Amazon and deliver them from inventory already in the country within five business days. But there was a critical difference from the model that Americans are familiar with: Amazon did not set up its own logistics center here, and sellers were required to handle inventory and delivery themselves.
Zigdon points out that Marketplace works well when it gives a supplier something that is difficult for them to achieve on their own - a huge target clientele, exceptional logistics and trust that justifies a higher price. But in a small market, when the same importer can sell on its own website, and the consumer can compare prices in seconds, any additional commission may become a disadvantage. "The Israeli consumer is in a very small and crowded market," explains Zigdon. "If the same importer sells a product for NIS 1,000, and then on Marketplace has to add to the price because of the commissions, a problem arises. Maybe the customer is exposed to the product on Marketplace, but in the end they go to buy directly from the seller."
Compared with Amazon’s partial experience in Israel, in recent years, it is AliExpress’s investment in a local presence that stands out. Parcel Home, a logistics arm that delivers packages from AliExpress, launched operations in Israel in 2024 and operated about 45 distribution points as of April 2026.
At the same time, AliExpress operates local warehouses that in some cases allow shipping times to be shortened to 7-10 days and has added the option to pre-select a preferred pickup point near your home. "The thing that hinders e-commerce the most is presence in the field and advertising," says Zigdon. "This is perhaps one of the reasons why it doesn't work for Amazon in Israel like it does in other markets."
The local trial failed
In December 2023, the marketplace activities of Azrieli, Melisron, and Shufersal were closed within a week. Azrieli had invested in Azrieli.com over the years and recorded losses of about NIS 300 million. Melisron's investment in Groo's activity reached about NIS 100 million. Industry sources told "Globes" at the time that to maintain a trading arena, large investments are needed in traffic, advertising, customer service, technology, and logistics and in the local market it is difficult to reach a turnover that justifies all this.
A marketplace is not just a site with many products. It is a business of economies of scale. More buyers bring more sellers, more sellers bring more selection, and selection brings more buyers and then you can charge the sellers commissions, logistics services, and advertising. In the US, Amazon is deep into this cycle. In Israel, anyone starting from scratch must finance it.
The KSP chain provides an interesting example. In June, it was the leading Israeli site in the Shop Analytics index, with 18% of orders on the top 20 local sites. According to Zigdon, "KSP is very successful even though it is a retailer that buys and sells. It has become a multi-brand, and that is something that Israelis love. It also does a lot of parallel imports to really break the prices. Maybe the Israeli market has no place for a general marketplace in the classic model."
This conclusion also ties in with Shop Analytics data. In May, the three leading Israeli sites were KSP, SuperPharm and Shufersal - three players that started with specific retail operations, and only later expanded their offerings other categories.
Published by Globes, Israel business news - en.globes.co.il - on August 23, 2026.
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