Promoting E-Commerce Growth in Israel


The novel coronavirus is testing our resources and creativity in ways we never imagined. We look to government for support; we turn to communal social service organizations for assistance; we look to our scientific and medical community for innovation and answers; we look to our schools for creative educational approaches; and we look to one another for patience and understanding. Each of these relationships calls on a sense of mutuality — we are all in this together, so let’s work together to solve the problem.

Governments around the world have tried various approaches. Most include a financial infusion designed to help newly unemployed citizens through difficult economic times. In Israel, for example, the government has distributed the equivalent of $300 million to Israeli families. That has been a significant investment, and more will be needed. But is money alone enough?

Israeli venture capitalist Michael Eisenberg has proposed a different approach, which he argues will allow the government to provide needed relief support, while at the same time upgrade what he sees as Israel’s faltering e-commerce platform. In a recent series of tweets, Eisenberg suggested that the Israeli government support for pandemic-burdened citizens be in the form of vouchers instead of cash, and that the vouchers be tied to e-commerce activity, like online shopping. His goal is to promote more local e-commerce activity and, through competition, help build Israel’s e-commerce infrastructure and competitive edge. “The world operates on incentives,” said Eisenberg, managing partner at the Tel Aviv-based Aleph Venture Capital. “If you give people money, they’ll stay at home. But if you give them money that they have to spend, they’ll spend it. And therefore proper channeling of money can jumpstart the entire economy.”

Eisenberg asserts that the e-commerce experience in Israel is lagging: “User experience is poor, as is customer service and logistics.” He posits that a little competition, spurred by government-sponsored relief vouchers, will help improve e-commerce and encourage brick-and-mortar stores to elevate their game and compete by investing in e-commerce technology. It will also help Israel wean itself from reliance on U.S. and Chinese online markets.

“The citizens of Israel are in need of jobs and investment in the infrastructure of the future,” Eisenberg tweeted. “Stop handing out money and start investing in the future — the future of business, the future of infrastructure, and the future of employment. It is happening with or without us. We will be better off taking part in the game.”

We think Eisenberg’s idea is worth exploring. His voucher suggestion could benefit those in need, help build business opportunity for those who innovate, and ultimately bring value to consumers and growth to the economy. And the idea of government money doing a form of “double duty” by helping those in need and promoting innovation and growth has the potential to be a win-win experience — a very rewarding approach for the start-up nation. JT


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