After much speculation that online giant Amazon would soon be selling retail in Israel, a report on Bloomberg News Sunday indicated that another American retailing icon – Wal-Mart – could be making its way to Israel as well. According to the report, Prime Minister Binyamin Netanyahu met with top Wal-Mart executive John Furner at the recently completed World Economic Forum in Davos, Switzerland, and urged him to open branches in Israel.
The purpose of the entry of Wal-Mart into Israel would be to use the retailing giant’s leverage to reduce the cost of household and everyday goods for Israelis, with the retailer expected to discount in Israel as it does in the U.S. According to the report, Netanyahu offered several incentives to the company, including reducing the level of regulations that importers generally need to comply with, as well as providing tax and other economic incentives.
Present at the meeting, according to the report, was Netanyahu’s economic adviser Avi Simchon. The report quoted him as saying that Netanyahu “made it clear we are ready to ease regulatory burdens wherever possible to make the market more accessible to them. The door to Netanyahu’s office is open,” he told Bloomberg. Wal-Mart had no comment on the matter, the report added.
Meanwhile, Amazon continues to prepare for its entry into the Israeli market, a report in Globes said. According to the report, Amazon executives in recent months have met with executives from Israeli manufacturers and importers in an effort to determine the best way for the company to enter the marketplace, and to understand current market conditions in preparation for its Israeli launch. The report said that Amazon executives met with Israeli food manufacturers as well, even though according to previous reports the company is not planning to sell food in Israel. Because of issues of distance and storage, the company plans, at least initially, to concentrate on selling clothing, books, electronics, and other items with indefinite shelf lives. The government has been encouraging the entry of Amazon into the Israeli marketplace as well as a way to reduce the cost of household and personal goods for Israelis.
Israeli suppliers interviewed by Globes said that they would be happy to work with Amazon. “The pressures by Israeli wholesalers on local manufacturers, together with the buyouts and partnerships that create a non-competitive marketplace situation, put a great deal of pressure on suppliers,” one manufacturer told the newspaper, adding that manufacturers believe they could get better deals from Amazon.