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

Amazon holds only 6% of the Israeli online retail market, while Chinese platforms AliExpress, Temu, and Shein together account for about 75% of orders, according to Shop Analytics data from June 2026. Experts attribute Amazon's struggles to its lack of local logistics infrastructure and the challenges of operating a marketplace in a small, crowded market. Amazon's 2019 Local Delivery program failed due to the absence of its own logistics center, requiring sellers to handle inventory and delivery themselves. Meanwhile, AliExpress invested in local logistics through its Parcel Home arm, which launched in Israel in 2024 and operated about 45 distribution points by April 2026, along with local warehouses that shorten shipping times to 7-10 days. Local marketplace trials by Azrieli, Melisron, and Shufersal closed in December 2023 after significant losses, with Azrieli recording losses of about NIS 300 million. The KSP chain led Israeli sites with 18% of orders on the top 20 local sites in June 2026, suggesting the Israeli market may not have room for a general marketplace in the classic model.

Amazon holds only 6% of the Israeli online retail market, while Chinese platforms AliExpress, Temu, and Shein together account for about 75% of orders, according to Shop Analytics data from June 2026. Amazon's 2019 Local Delivery program, which invited Israeli sellers to present products through Amazon and deliver from local inventory within five business days, failed because the company did not set up its own logistics center, requiring sellers to handle inventory and delivery themselves. E-commerce expert Nir Zigdon explains that in a small, crowded market, the same importer can sell on its own website, and any additional commission from Amazon becomes a disadvantage. Meanwhile, AliExpress invested in local logistics through its Parcel Home arm, which launched in Israel in 2024 and operated about 45 distribution points by April 2026, along with local warehouses that shorten shipping times to 7-10 days. Local marketplace trials by Azrieli, Melisron, and Shufersal closed in December 2023 after significant losses, with Azrieli recording losses of about NIS 300 million. The KSP chain, a retailer that buys and sells, led Israeli sites with 18% of orders on the top 20 local sites in June 2026, suggesting the Israeli market may not have room for a general marketplace in the classic model.