Israel As An Export Market
The webinar was hosted by the Israel Chamber of Commerce and Industry (ICCP) which incidentally welcomes paid membership to just about everyone into trade and industry and business and commerce. Featured was FICC, the Federation of Israel Chambers of Commerce which was founded in 1919 as an umbrella organization with over 5,000 businesses and organizations now.
Israel at a glance gives you 9 million plus population, 75 percent of whom are Jewish and the rest Muslims, Christians and Druize. GDP is USD350 billion with per capita GDP of USD43,000. Leading industries are ICT, Pharma, Life Sciences, Defense and Aerospace, Smart Cities and Water Technologies.
As a whole, the EU is Israel’s trading partner, though the US is the largest single country. Israel pursues FTAs and international economic cooperation, and joined the OECD in 2010. Israel is diversifying its trading relationships by emphasizing trade with China, Brazil, and India.
Import of goods to Israel in 2019 was valued at USD76.6 billion, including machinery and electrical equipment, vehicles and aircraft, minerals, chemicals diamonds, metals, food, textile, plastic and rubber, optical and medical instruments, and others. Food was valued at only at 4 percent.
Major country sources are Europe 48%, Asia 22%, USA 16%, and Others 14%.
Top 5 reasons to export to Israel
Strong economy/high population growth (2050 – 17 million people)
Developed economy, crowded and sophisticated market – all international companies are here
Strong purchasing power/strong currency
Good business culture – English speakers, early adaptors
Easy logistics – 70% of population is between (“Hadera and Gadera”) only need to find one strong local partner
It is a mature market in many sectors and Philippine companies will face significant local and international competition. It is also a very complex and competitive market with as many threats as opportunities. A very dynamic market, its market structures change constantly and buying motives today are very different from those of 5 years ago.
The distribution methods vary by type of products. Roughly 40% of Israel’s 7.8 million people are concentrated in the greater Tel Aviv metropolitan area, Israel’s commercial and financial center.
Consumer malls and shopping centers are popular in Israel. Over 200 malls and shopping center exist and others are planned.
Channels of distribution
Commissioned agents: used mainly for industrial equipment, raw materials and commodities
Non-stocking agents: used mainly by manufacturers
Stocking agents: used mainly for high volume items
Importers/distributors: used often for consumer goods
Franchising/Licensing: since its introduction to Israel in the mid-1980s, franchises have increased in popularity. ACE Hardware, Office Depot, Re/MAX, McDonalds, Toys-R-Us, UPS, FedEx, American Eagle all operate in Israel.
Joint ventures are the most popular method of cooperation for Israeli firms especially in technology-related industries.
Israeli businesses prefer licensing agreements in which the licensor takes equity with the licensee.
Companies should seek advice from a competent law firm and accounting firm when figuring tax liabilities.
Transportation and Logistics
Shipping to Israel takes about 14 to 30 days, affecting supply time and costs.
Cost of shipping by sea compared to shipping to Europe is about 30% higher.
No direct lines by air and sea.
IMPORT & JOINT VENTURE OPPORTUNITIES
Automotive aftermarket parts & equipment
Electricity & Energy
Food & beverages
Clothing & Footwear
Transportation
Intelligent systems
Infrastructure
Electronic components
Medical equipment & instruments
Telecommunications
Travel & Tourism