Amazon To Enter Israel’s Retail Sector? Company Gathering Isrealis’ Online Shopping Data

Global e-commerce giant and now the world’s second-most valuable company by market capitalization, Amazon.com, Inc. is reportedly planning to deepen its retail operations in Israel. The Jeff Bezos company already has a presence in the country, but products made in Israel are not currently available on the Amazon platform for Israelis to buy.

Amazon has been sending questionnaires to its customers in Israel, asking them about their online shopping behavior, the country’s Haaretz newspaper reported Friday. The company has been asking Israelis how often they buy goods online, and what sites they buy them from, even providing a list of local e-commerce players (AliExpress, ASOS, Castro, Deal Extreme, eBay, Next, Rami Levy and Shufersal, other than Amazon) to choose favorites from.

Additionally, the company also made initial overtures to local food producers, to see how they feel about producing goods for its Amazon Basic label, Haaretz reported.

Sending questionnaires to customers to better understand their online shopping habits is something the company had previously done in Australia, months before launching full-fledged operations there.

Entering the Israeli market, including sourcing locally made goods to sell on its platform, would be a logical move for Amazon. The company has already lost out on China, the biggest retail market in the world in population terms. And earlier in May, its competition in the world’s second-most populated country went up a few notches, after United States rival Walmart bought the majority stake in Flipkart, the popular Indian e-commerce platform.

The company has about a decade of experience shipping fresh food in the U.S. and the United Kingdom. Expanding its fresh food footprint, it also acquired organic food store chain Whole Foods in July 2017 for $13.7 billion. Showing off its technological prowess, Amazon also opened a store in Seattle as a pilot of its Amazon Go grocery line, where customers could simply pick merchandise off shelves and walk out. There were no check-out counters or queues, and customers’ Amazon accounts were directly charged for whatever they bought.

But getting into the food business in Israel would be tricky. For one, Amazon would need to create a supply chain with refrigeration facilities, an expensive affair. And for two, it would need to abide by kashrut, or Jewish dietary laws based on religious belief.

Still, Israel is a lucrative market, one in which Amazon’s food foray will likely come a few years after it enters other, non-perishable sectors. Online sales in the country have grown at an annual rate of about 25 percent over the last five years, and the e-commerce market is estimated to be worth over $4 billion by 2020.

Shares of Amazon closed 0.35 percent lower Thursday on Nasdaq, giving it a market cap of over $762 billion. Its largest competitor Walmart saw its shares closing 1.85 percent lower on the New York Stock Exchange, bringing its market cap down to just under $245 billion. Markets performed poorly on Thursday in general, spooked by President Donald Trump’s comments about trade negotiations with China not going well.