Roundtable: E-Commerce in Israel – From Lagging to Leading

The Israel Democracy Institute | 4 Pinsker Street, Jerusalem

Israel is one of the world's leaders in the size of its local internet economy.  In 2009, e-commerce represented 6.4% of Israel's GDP, a figure that is expected to grow to 8.5% by 2015.  Despite this, Israeli e-commerce is falling behind developments in this field in other Western countries.  For example, only 0.5% of Israel's GDP (approximately 4 billion shekel) can be attributed to consumption of goods and services on the internet.

On Wednesday, January 18, 2012, IDI's George Shultz Roundtable Forum hosted an in-depth discussion of strategies that will enable Israel to become a leader in e-commerce.  A joint initiative of IDI and Google, this event explored the following questions:

  • Why is it important to increase consumer e-commerce?
  • What types of regulation are necessary to promote e-commerce in Israel?  Which aspects of the trade and supply chain need greater focus?
  • How can the state and private entities help businesses make better use of the internet as a sales channel?


  • Dr. Arye Carmon, President of the Israel Democracy Institute
  • Mr. Meir Brand, CEO of Google Israel and Google Regional Director for South Africa and Greece



  • Daniel Aminetzah, Engagement Manager at McKinsey & Company
  • Ms. Galit Avishai, CEO of Public Trust
  • Aron Di Castro, Head of Israel Domestic Business, Google Israel
  • Attorney Yoram Hacohen, Head of the Israeli Law, Information and Technology Authority (ILITA) at The Israeli Ministry of Justice
  • Richard Hunter, former chief business manager of Super-Sol
  • Attorney Dr. Nimrod Kozlovski, Tel Aviv University and
  • Nir Lampert, CEO Israel Golden Pages
  • Attorney Uriel Lin, President of the Federation of Israeli Chambers of Commerce
  • Attorney Tamar Pincus, Commissioner of the Consumer Protection Authority
  • Amos Ron, President and Co-Founder of PlugWallet
  • Raanan Saad, Vice President Marketing and Business Development, Direct Insurance Group
  • MK Ronit Tirosh, Chairperson, Knesset Science and Technology Committee
  • Shahar Turgeman, CEO of Daka 90
  • Avi Waldman, Managing Director, Flying-Cargo Logistics Ltd.
  • Mr. Oded Zahavi, PayPal Regional Manager for Israel
  • Mr. Udi Zilberberg, Head of Direct Banking at Bank Leumi

Mr. Meir Brand, CEO of Google Israel, which joined IDI in hosting the roundtable discussion, said that expanding Israel's e-commerce sector would improve Israelis' quality of life drastically, decreasing the cost of living and increasing Israel's commercial presence on a global scale.

Brand lamented the fact that although Israel is a world leader in its internet economy, its e-commerce sector is far behind that of other OECD countries, accounting for a mere 0.5% of Israel's GDP in 2009.  He predicted that increased Internet trade would be beneficial to both large and small businesses, decreasing distribution costs by up to 90% and expanding operations on both a local and international level.

"In my eyes, we must discuss how we can expand electronic trade in Israel and contribute to its economic growth in a way that safeguards the privacy of the consumer while improving revenues," Brand said.

Kadima MK Ronit Tirosh, Chair of the Knesset Committee for Science and Technology, called on the government and the Knesset to encourage the expansion of Israel's e-commerce sector.  She stressed the importance of Knesset regulation in this area, particularly in light of recent cyber attacks on Israeli credit-card-holders and websites.  "The government needs to ensure that citizens can enter the e-commerce sector as easily and seamlessly as possible," Tirosh said.  "The Knesset needs to supervise and regulate the process."

PayPal Regional Manager for Israel Oded Zehavi said that while Israelis shied away from Internet shopping in the past, preferring to "touch" merchandise they intended to purchase, the past year has proven that things are changing.  Zehavi said that the number of Israelis buying from group coupon sites and from international vendors online has increased significantly in the past year, proving that Israelis are open to Internet trade.

IDI President Dr. Arye Carmon added that these types of technological developments can lead to a change in Israel's ultra-Orthodox community.  "It breaks down ghetto walls and tears down barriers - this is good news," he said, adding, "we do not want to defeat anyone, but rather integrate them into the process.