Study Reveals International E-Commerce Giants Overcharge Israeli Shoppers

A comprehensive study by the Federation of Israeli Chambers of Commerce reveals that international e-commerce giants charge Israeli consumers prices dozens and sometimes hundreds of percent higher than those in European nations for identical products.

The findings highlight concerns that the VAT exemption benefit fails to reach local shoppers, instead absorbed into the profit margins of global retail platforms. The study examined dozens of leading products on popular sites in Israel, including ASOS, SHEIN, AliExpress, Next, and Temu, using VPN browsing and incognito mode targeting the United Kingdom, Germany, France, and Greece.

Prices in Israel were found to be significantly inflated despite excluding local VAT. For instance, a rhinestone-adorned evening dress on SHEIN was priced at 279 NIS for Israelis—double the price in the United Kingdom, which stood at approximately 139.6 NIS. Another lace dress sold for 329 NIS domestically compared to 188.9 NIS in the UK, marking a 74% gap.

Price discrepancies extended across sports brands and household goods. A three-pack of Adidas socks on ASOS cost 65 NIS in Israel compared to 36.6 NIS in France and Germany, a 77% difference. New Balance caps and Adidas t-shirts showed markups ranging from 29% to nearly 34%.

According to the Federation, the volume of VAT-exempt parcels surged 3.2-fold between 2020 and 2024, with purchase values exceeding 1.16 billion dollars annually. Potential state VAT revenue losses reached approximately 196 million dollars in 2024 alone.

Analysts suggest international platforms exploit Israeli consumer familiarity with tax exemptions by inflating base prices and using deceptive promotional coupons. The Federation warns that local businesses, bound by full VAT obligations, face severe, distorted competition.