Amazon Trails Chinese Platforms in Israel
While Amazon continues its global expansion, the e-commerce giant has struggled to capture meaningful market share in Israel. According to Shop Analytics data from June 2026, Chinese platforms AliExpress, Temu, and Shein accounted for roughly 75% of Israelis' online orders, while Amazon held just 6% of the market.
The figures underscore a stark contrast between Amazon's international strength and its limited traction in Israel, a market that has proven difficult for the company to penetrate despite its efforts.
Amazon's Local Delivery Program: A Half-Hearted Attempt?
Amazon's challenges in Israel are not for lack of trying. In April 2019, the company reached out to Israeli sellers to join its Local Delivery program. The initiative aimed to allow suppliers to present products to Israeli consumers through Amazon and deliver them from inventory already within the country, with a promise of delivery within five business days.
However, a critical difference from Amazon's model in other markets emerged: the company did not establish its own logistics center in Israel. Instead, sellers were required to handle inventory and delivery themselves, a departure from the streamlined fulfillment that Amazon typically offers.
Expert Analysis: Why Marketplace Fails in a Small Market
Nir Zigdon, an e-commerce expert and CEO of ECommunity, explained that Amazon's marketplace model thrives when it offers suppliers something they cannot easily achieve on their own—such as a vast customer base, exceptional logistics, and the trust that justifies higher prices.
In a small market like Israel, however, these advantages diminish. “The Israeli consumer is in a very small and crowded market,” Zigdon said. He noted that if an importer can sell directly through their own website, and consumers can compare prices in seconds, any additional commission from a marketplace becomes a disadvantage.
Zigdon illustrated the point: “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. Maybe the customer is exposed to the product on Marketplace, but in the end they go to buy directly from the seller.”
He added that the lack of local logistics infrastructure further hampers Amazon's competitiveness, as faster delivery options from local warehouses are not available.
Chinese Competitors' Success
In contrast, Chinese platforms have invested heavily in local infrastructure. AliExpress launched its Parcel Home logistics arm in Israel in 2024, and by April 2026, it operated around 45 distribution points across the country. The company also maintains local warehouses, which in some cases reduce shipping times to just 7–10 days, making them highly competitive with local and international retailers.
Temu and Shein have also gained significant traction, capturing the attention of Israeli consumers with low prices and aggressive marketing.
Local Retailers Face Their Own Challenges
The difficulties of operating an online marketplace in Israel are not unique to Amazon. In December 2023, the marketplace activities of major local players—Azrieli, Melisron, and Shufersal—were shut down within a week. Azrieli recorded losses of about NIS 300 million on its Azrieli.com investment, while Melisron's investment in Groo's activity reached approximately NIS 100 million.
Despite these setbacks, some local retailers have found success. In June, the KSP chain was the leading Israeli site in the Shop Analytics index, capturing 18% of orders among the top 20 local sites. In May, the three leading Israeli sites were KSP, SuperPharm, and Shufersal, demonstrating that niche players with established physical presence can thrive online.
The Future of E-commerce in Israel
Zigdon noted that the Israeli market may not have room for a general-purpose marketplace in the classic model. He emphasized that “the thing that hinders e-commerce the most is presence in the field and advertising,” suggesting that without significant investment in physical infrastructure and marketing, even global giants like Amazon will struggle to gain a foothold.
As Chinese platforms continue to expand their local logistics and delivery networks, Amazon's position in Israel appears unlikely to improve unless it adapts its strategy to the unique characteristics of the market.