Israeli E-Commerce Nears $1 Million in Monthly Revenues

At a seminar on e-commerce for Israeli consumers, a spokesman for NetVision, the largest Internet provider in Israel, estimated that the scope of
e-commerce in Israel reaches three to four million NIS (nearly US$1 million) a month.

According to Avi Behagen, marketing development manager for NetVision, NetVision public auction
site NetAction alone sells monthly over 1.25 million NIS via the Net,
and this figure does not include periodic car auctions which increase
the turnover substantially.

Behagen emphasizes that the Israeli market
has many unique characteristics, such as its centralization and small size, and he doubts if any Internet revolution could
seriously change this status.

According to Behagen, three factors will reportedly influence the e-commerce map and the
Internet in Israel in the coming years: banks, newspaper giants and
communications companies.

Behagen believes that the banks will want to significantly develop e-commerce
and will invest in infrastructure and designs and may even
acquire service providers and existing portals.

The newspaper giants, most of which currently have no presence in this area, are waiting for strategic decisions to begin their activities and become the “portal of the country”. This will be achieved through acquiring existing portals and setting up new joint-venture portals. Newspaper giants will be strong players in Israeli e-commerce due to connections already established with direct shopping channels, shopping catalogues and public auction publications.

Communication companies are also important players, but their acquisition choices are limited within
recognized business restrictions.

Roni Cohen, of the advertising agency Tamir-Cohen, which owns of the Israeli portal NetKing, speculates that the Israeli Internet is on the brink of a breakthrough which will come about
when Net usage statistics hit 20 percent of Israeli households. Today the figure is between 12
and 13 percent.

According to Cohen, the high costs of Internet connections and computers in Israel prevent more rapid growth in the number of users. Recently new e-commerce markets have opened as a result of the drop in prices and an increase in the number of Internet users, this in turn will be reflected in a significant growth in Israeli e-commerce.

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