Azrieli exec: Amazon's entry to Israel won't change anything

Ofer Yarom

Ofer Yarom: Israeli ecommerce provides products faster and at lower cost than Amazon.

Will Amazon's commercial activity in Israel threaten local ecommerce websites? Income-producing real estate firm Azrieli Group Ltd. (TASE: AZRG), controlled by chairman Danna Azrieli, believes that local ecommerce websites should not be taken lightly. The group holds that Amazon's entry into Israel will not cause upheaval in the existing websites.

"Israeli ecommerce has many advantages for the Israeli consumer in service and price. Amazon's entry changes nothing. Israeli ecommerce provides products faster and at lower cost than the international competitor," Ofer Yarom, manager of Azrieli group's ecommerce website, said today during a panel at the GO eCommerce conference.

Yarom manages online activity, with which a range of suppliers are planning to soon begin sales on Amazon in competition with Azrieli's website. "Products have a 'home' here in Israel: we know from whom we buy, from whom we get service, and whether or not it is easy to return or replace products. When apples are compared with apples, the prices of products in Israeli ecommerce are competitive, and when delivery costs are included, the Israel products are cheaper in many cases," Yarom asserts.

"The entry of Amazon on the format being mentioned neither expands products nor improves service, but it does generate additional costs for suppliers and includes taxes on products."

Amazon's activity in Israel, however, which will be launched in the coming weeks, is based completely on Israeli businesses, many of which now sell on online platforms like that of Azrieli. In other words, the "home" mentioned by Yarom is relevant to the same degree to makeup, electrical appliances, and diapers purchased on Amazon, because the format for Amazon's entry into Israel is selling from within Israel to within Israel by the same suppliers, and the commissions charged by Amazon are similar to the commissions the Azrieli now demands from suppliers.

Nevertheless, as of now, Azrieli's suppliers are benefiting from the fact that they do not have to pay the delivery costs, because Azrieli itself pays the costs for them. Amazon will require every supplier to pay its own delivery costs, at least at this stage, so these costs are liable to prove a barrier for certain categories.

Published by Globes, Israel business news - en.globes.co.il - on July 24, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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