It’s still a work in progress, and not yet in Hebrew, but Amazon Israel offers convenience and bargains, especially in electrical appliances.
Yesterday, Amazon launched the latest stage in its entry into the Israeli market – a local retail website with Israeli chains and deliveries within Israel. Despite the enormous efforts Amazon made to stage its launch before Rosh Hashanah in order to benefit from holiday gift shopping, the website appears to be an initial version requiring improvements. Which companies are offering attractive value for consumers, which are still experiencing birth pains, and who is still waiting to launch activity?
The most prominent disappointment is that the launch is in English. Sources in the sector believe that the decision was made in order to go on the air as scheduled, and that this situation is temporary. The improvements that will be made in the coming months are expected to include a transition to a Hebrew version with a URL ending in co.il. The upside is that Israeli suppliers accepted Amazon’s forceful recommendations, and are offering free delivery within five days.
Among the most prominent fashion companies that went on the air with an online store in Amazon’s launch is Adika, controlled by the Golf group; swimsuit brand Gottex; the Crazy Line fashion chain; the 911 group’s Story chain, Style River, the online fashion brand acquired by the MGS group from the Zap group; and the Zohara brand of tights, currently sold on the Be network. Also available are personal care and cosmetics products, such as the GA-DE cosmetics brand; skin care products manufacturer SeboCalm; and Dead Sea personal care products brand -417.
In furniture and home goods, the most prominent retailers on Amazon at this stage are bedding and towels brand Vardinon, cutlery manufacturer Naaman, furniture company Shomrat Hazorea, and mattress manufacturer Panda, which has no physical stores in Israel and sells exclusively online. Bookstore chain Tzomet Sfarim went on the air with an online store on Amazon. Amazon began in the early 1990s in the books category.
The leading companies selling on Amazon in electrical appliances and electronics are Electra Consumer Products, Fujicom, Brimag, Newpan, Dynamica, and Nintendo, which means offerings of many refrigerators, washing machines, ovens, televisions, mobile phones, and tablets. Another company is marketing mobile phone accessories on Amazon such as covers, cables, and battery chargers – 019, which won its own banner. Another Israeli company that began selling on Amazon is Source, which manufactures and markets equipment for hikers and backpackers.
Some of the consumer goods companies that announced their intention of working on Amazon have not yet gone on the air, and are likely to do this in the next few days or weeks. No large or medium-sized player in the food sector has put up an online store yet. The only player on the air so far is a small supplier named Sindyanna of Galilee, which manufactures “fair trade” olive oil.
The available bargains on the day following the launch are exceptionally heavy discounts worthy of note that are likely to continue for a month after the launch. For example, Newpan is selling a Toshiba television on Amazon for NIS 1,566, a discount of nearly 50% on the standard price on competing platforms. Another product being offered by Newpan on Amazon at an especially cheap price is Magimix fruit juicers for NIS 524, 65% cheaper than on competing platforms and prices available on Zap. A Tefal steam iron is being sold for NIS 104, a 30% discount.
Fujicom went on the air with attractive prices for some of its products, but other are being sold at the same prices available on other online platforms. For example, a Haier television is being sold at an exceptional discount, while a washing machine that we checked was being sold at the same price as on competing platforms. At the same time, on Amazon, the supply time of a free delivery is much shorter: 2-3 days, compared with 6-7 days on competing platforms.
It appears that some of the fashion retailers are having trouble offering attractive prices on Amazon, among other things because of the cost of delivery and the 17% fee charged by Amazon in this category. 911, for example, owner of the Story fashion chain, is offering a Paper brand shirt on Amazon for NIS 275, including free delivery. Exactly the same shirt can be found on Story’s sales website for NIS 249 with a promise of free delivery in a transaction of over NIS 200. In other words, you will have to pay 10% more if you want to order a shirt through Amazon. Another shirt of the same brand is being sold on Amazon for NIS 498, 11% more than the NIS 449 price on the company’s website.
Prices are also higher on Crazy Line’s online Amazon store than on Crazy Line’s own website. A random check of a leopard skin shirt with a gold buckle found that it is being sold on Crazy Line’s website for NIS 170, after a NIS 50 discount and on Crazy Line’s Amazon store for NIS 180.
The differences are smaller on Adika’s online Amazon store. A randomly selected Adika t-shirt is being sold for NIS 93 on Amazon and NIS 89 on Adika’s own website, a 4% difference. In Adika’s case, however, buying on Amazon will be the same or very slightly more worthwhile, because it saves NIS 9 on delivery. Delivery is within five days in both of these cases.
In any case, this is not a comprehensive price comparison for any particular brand; it is merely an initial attempt to take a sample to see whether the brands that went on the air cost more or less on Amazon. The conclusion is that in categories such as fashion, the prices on Amazon are nothing unusual. In electrical appliances, products can be found at really large discounts. What is clear is that Amazon’s main focus, both in Israel and worldwide, is not based on an especially cheap price, but on convenience and a high level of service, which depends among other things, on Amazon’s future willingness to supply the item itself, whether from a local central logistics center or through other solutions.
Published by Globes, Israel business news – en.globes.co.il – on September 23, 2019