Amazon struggles to win Israeli shoppers while Chinese e-commerce giants dominate

Despite its worldwide dominance, Amazon has failed to secure a significant foothold in Israel's online retail market. Data from June 2026 reveals that Chinese platforms AliExpress, Temu, and Shein collectively command about 75% of Israeli online orders, leaving Amazon with a mere 6% market share.

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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.

E-commerce expert Nir Zigdon notes the anomaly, stating, "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." Amazon attempted to penetrate the Israeli market in April 2019 with its Local Delivery program, inviting Israeli sellers to offer products for delivery within five business days from local inventory. However, this model differed from Amazon's familiar approach as it did not establish its own logistics centers in Israel, requiring sellers to manage inventory and delivery independently.

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The Israeli consumer is in a very small and crowded market.

Zigdon explains that e-commerce marketplaces thrive when they offer distinct advantages like access to a vast customer base, superior logistics, or established trust that justifies higher prices. In Israel's small and competitive market, he points out, "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." Consumers can easily compare prices and may opt to purchase directly from the seller to avoid additional commissions.

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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.

In contrast, AliExpress has actively invested in a local presence. Its logistics arm, Parcel Home, launched in Israel in 2024 and operated around 45 distribution points by April 2026. AliExpress also utilizes local warehouses, enabling shipping times of 7-10 days and offering preferred pickup points. "The thing that hinders e-commerce the most is presence in the field and advertising," Zigdon concludes, suggesting this is a key reason for Amazon's struggles in Israel compared to other markets. Previous attempts by local marketplaces like Azrieli, Melisron, and Shufersal also faced difficulties, with some closing within a week.

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The thing that hinders e-commerce the most is presence in the field and advertising.