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Amazon Launches a Local Retail Operation in Israel

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Amazon selects packaging supplier for Israel

Amazon (AMZN) is launching a local marketplace in Israel, a sign that the company is seeking to take better advantage of the increased popularity of online shopping in the country. Last month, Amazon began inviting Israeli merchants that already sell to overseas customers through its platform to register to reach customers in Israel. The company has now gone on to select Hadera Paper as its official local packaging supplier for Israel, according to a report from Calcalist.

In an apparent attempt to accelerate its penetration of the Israel e-commerce market, Amazon is also building a version of its local marketplace that will be available in Hebrew.

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e-Commerce boom in Israel

Amazon is expanding in Israel at a time when online shopping is rapidly gaining popularity in the country as households look to cut costs on everyday purchases amid a soaring cost of living. Israel’s e-commerce market is expected to generate $3.8 billion in revenue in 2019 and grow to $5.7 billion by 2023, according to Statista data.

e-Commerce companies set their sights on Israel

Amazon’s expansion plans for Israel come at a time when its Chinese rivals Alibaba (BABA) and JD.com (JD) are also hunting for opportunities in the country. In March, Alibaba bought Israeli augmented reality startup Infinity AR. Last year, Globes reported that JD executives had been visiting Israel in search of strategic investment and partnership opportunities in the country. That JD may be looking for investment opportunities in Israel comes as no surprise, as last year the company partnered with Google (GOOGL) to help it expand overseas as it sought to take its battle with Alibaba beyond Chinese borders.

Yandex (YNDX), the Russian search engine giant that runs a joint-venture taxi business with Uber Technologies (UBER), introduced its ride-hailing service in Israel late last year. Yandex also operates an e-commerce division in Russia, which it may someday want to bring to Israel.

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