Israelis love shopping online, but businesses haven’t followed suit

A survey of 17,600 consumers in 22 countries found that Israelis are among the top buyers of cross-border products online.

JANUARY 1, 2015 18:38

Computer keyboard [illustrative]. (photo credit: ING IMAGE/ASAP) — Computer keyboard [illustrative].

(photo credit: ING IMAGE/ASAP)

Israelis love online shopping, according to a new Ipsos/MORI international survey commissioned by PayPal, but local businesses have not kept up with the demand.

The survey of 17,600 consumers in 22 countries found that Israelis are among the top buyers of cross-border products online, next to Austria and Australia. Nearly three-quarters of Israelis (72 percent) buy goods online, with 82% of those buying goods from abroad.

Not surprisingly, the biggest reason for looking abroad for goods is that they’re cheaper. Even with shipping costs, value-added tax and, in cases of some goods over $500, import duties, 57% of Israelis find cheap cross-border shopping the best reason to buy online. The next best reason is convenience, but they also look for a greater variety of products.

Companies that offer free shipping, delivery guarantees and products not available locally are likely to get more Israeli business.

At the same time, Israelis are concerned that items they buy online will not match their descriptions, that they will not know how to deal with import taxes and that the item won’t arrive.

Over half lament that shipping costs can far exceed the price of the item they are buying.

Efi Dafan, Paypal’s regional director of Sub-Saharan Africa and Israel, said the government needs to reform and simplify the whole process, from customs to mail delivery.

That, he added, would help lower the cost of living by introducing more competition.

Israeli businesses are less likely to be selling online, according to another survey conducted by the Israel Internet Association ISOC-IL.

The target group index survey, which interviewed 300 small- and medium-business owners, found that just 26% of them sell online.

Businesses, they found, don’t know how to market and sell their goods online and have trouble creating the logistical infrastructure around online shopping.

That, said ISOC-IL’s Amir Etzioni, is a major missed opportunity for small businesses to grow.

It would also help the periphery, he said, as online businesses could store their goods away from centers and have them delivered.