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The market for online shopping sites in Israel heated up this week when Internet portal Walla launched two new services for the local market: auction site WallaBuy, billed as the Israeli version of international giant eBay, and WallaPay, an epayment solution modeled after Paypal in the US.
WallaBuy CEO Uri Nadler said the site would make Walla the first major player to offer a consumer-to-consumer (C2C) marketplace in Hebrew. Although a number of English sites offer C2C shopping in the form of online virtual communities, Nadler doesn't consider them competitors.
"Those sites are usually just message boards or e-mail lists, while this is a full e-commerce site," Nadler said.
Inside Walla's system, users can create shopping accounts linked to their bank accounts, so that payments can be executed easily over the Internet. Shoppers can bid on items for sale, with the money automatically transferred to the buyer once the seller confirms receipt. Products also can be delivered by UPS for an extra fee.
Walla had attempted to launch a similar site in 2000, but Nadler said the market wasn't mature enough to sustain it at that time.
"People were a lot less confident buying things online then," he noted.
Now, however, online purchases from retailers and resellers are growing steadily in Israel, with an estimated NIS 1.5 billion in transactions done via the Internet last year. That, along with Walla's popularity and the new e-payment mechanism, will ensure greater success this time, he said.
Walla expects the site to generate NIS 300 million in annual revenues within three years, and reach profitability within two years. Sellers will be charged a six percent commission on every sale and, after an introductory period, will also pay NIS 3 for every item offered, as well as a registration fee.
The WallaPay system, like Paypal, is designed to make online shopping easier throughout Israel. Currently, adding credit card processing is a costly process for web retailers. Walla-Pay will allow anyone to process payments easily, with users needing to create only one master account.
WallaPay was created as a separate business unit from other Walla sites, and will be used for multiple upcoming projects, Nadler noted.
WallaBuy should not be confused with retail shopping sites, or shopping comparison sites like Zap and Shopping.com that can help a shopper locate the best prices online, Nadler stressed.
"There are no other major Hebrew sites facilitating sales between individuals in Israel," he said.
While some may consider the introduction of an "Israeli eBay" (WallaBuy is not affilliated with eBay) as a watershed event for the local economy, Englishspeakers have long benefited from grassroots online communities that allow users to exchange information about events, jobs, services, and numerous other topics in addition to buying and selling items.
The largest and most popular of these is Janglo, which has more than 9,000 members in the Jerusalem area and handles more than 3,500 messages a month. Many Anglo-heavy neighborhoods now have similar email lists of their own, some with several hundred members.
Israbid, an English site, already has attempted to replicate eBay's success in Israel launching its portal last September.
"Israel is the perfect market to launch an auction site, because everybody here knows everybody, and people are always looking for the best deal," said Israbid's founder, Nachum Kligman.
Because "the Hebrew market is very different," Kligman believes his site will not compete directly with WallaBuy.
The writer is the founder of Janglo