Google Israel Country Manager: “E-commerce has become a driving force in Israel”

Amnon Merhav, director general of the Ministry of Economy, and Barak Regev, country director of Google Israel, discussed Tuesday at the Google and Calcalist e-commerce conference how to support Israeli businesses in difficult times and maintain a thriving economic environment.

“E-commerce has become a driving force in the Israeli business landscape,” Regev said. “At Google, we celebrate a decade of Shopping IL. A decade ago, only about 4% of Israel’s total business turnover came from the Internet; today, it’s 20%, and 50% of Shopping IL businesses operate exclusively in the digital sphere. This ability to maintain operations, whether during evacuations or reserve duties, provides essential support. On October 7, Shopping IL began operations to help businesses and reservists by accelerating their online presence. Over the past decade, we have expanded from 150 companies to 3,400 active businesses on the platform. We run academies and acceleration workshops to empower businesses, enabling them to grow and maintain a decent livelihood.”

Amnon, what role does the state of Israel play?

“The state works closely with Google at every Shopping IL event to highlight its role in promoting e-commerce and increasing economic competitiveness,” Merhav said. “By addressing the cost of living problem fueled by limited competition, the growth of e-commerce is opening up new opportunities for small businesses to compete with industry leaders. As a government, we are staunch supporters of this transformation, supported by our agency for small and medium-sized businesses.”

Did the war accelerate these trends?

“Although clear indicators have not yet emerged, we are seeing significant changes, especially among evacuees from places like Kiryat Shmona, where small businesses have relocated,” Merhav noted. “Through our business agency, we are providing comprehensive support, including consulting to develop strategic plans and establish online trading opportunities.”

Barak, how do you drive consumer engagement?

“During crises, we see an increase in demand, as Israelis increasingly use online shopping,” Regev emphasized. “In 2023, 93% of Israelis made purchases online, and 77% preferred Israeli brands. The Ministry of Economy cooperates through our Israeli headquarters at Shopping IL, strengthening local companies. Shopping IL serves as an important platform, pushing companies to the forefront and facilitating their development.”

“For consumers, this platform is invaluable, offering improved product availability and price comparison,” Merhav added. “We continue to challenge some of the top brands that redirect Israeli users to local sites, blocking international options to protect local importers. Our goal is to open up the global e-commerce market to Israeli consumers.”

Has the international boycott affected Israel’s economy?

“We have not seen any significant impact on trade with Israel,” Merhav confirmed. “The Turkish embargo, which amounted to $8 billion in annual imports, has been a challenge, but Israeli importers have been quick to adapt. We oppose the Finance Ministry’s proposal to withdraw the VAT exemption for online purchases to $75, seeing it as an additional tax burden. We support raising the exemption, perhaps to $150, to encourage greater competition and consumer access. The main challenge for e-commerce remains optimizing supply chains.”

Regev agreed: “Seven years ago, I identified supply chain logistics and last-mile challenges as critical barriers to online expansion. While progress has been significant, recent logistical disruptions during the conflict underscore the need for further improvements.”