In 2016, Azrieli Group (TASE: AZRG) bought an e-commerce platform, which it rebranded as Azrieli.com. Now, seven years later, it has announced the closure of the platform, and the layoff of most of its 70 employees. The company said that some of the employees would be re-assigned within the group.
In 2016, after buying the e-commerce activity of Buy2 for over NIS 60 million, Azrieli Group launched the Azrieli app, in the development of which it invested NIS 2 million. The activity incurred losses in the hundreds of millions of shekels.
In its announcement, Azrieli said that the closure decision was made on the basis of the assessment that the e-commerce market in Israel was still insufficiently developed, with a low penetration rate and a significant presence of global sites, in addition to local regulation that strengthens global sites at the expense of local ones, for example with an exemption from VAT for international sites only.
"Over the years, the group’s e-commerce operation has undergone substantial transformation. Changes were made to adapt the product offering to the taste of the Israeli consumer, and the technological infrastructure was overhauled, but these efforts did not meet a market sufficiently large to justify further investment in this area," the announcement said.
"The group will continue to invest in digital and innovation and will leverage the rich technological and digital know-how that it has accumulated in Azrieli.com and the development people employed on it. This activity will be headed by Daniel Koren, currently CEO of the commerce site. He will lead the process of integration for the benefit of the group’s core activities in general."
The website will continue to operate until December 22.
Published by Globes, Israel business news - en.globes.co.il - on December 17, 2023.
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