Israel is a rapidly growing alternative market in the Middle East. The import system is open, English is popularized, business practices are similar to those of the US and EU. More importantly, the hi-tech industry is thriving to boost the national income. Therefore, oversea businesses who intend to diversify their export business may consider expanding to the Israeli markets.
The high-tech industry is a key driver of Israel’s economic and employment growth. Between 2005 and 2007, the country’s real gross domestic product (GDP) increased by more than 5 per cent per annum, with per capita income (the fourth highest in the Middle East) increased by about 20 per cent during the period. Given Israel’s prudent regulation of the banking sector, the country remains largely unscathed in the current financial tsunami, but economic growth is likely to slow down in a sluggish external environment.
Israel is the only Jewish majority market in the Middle East. In accordance with traditional practices, the Jews during the year will be a number of holiday gifts to friends and relatives, so gifts, gifts, consumer electronics, fashion and accessories, jewelry and other high-quality products demand. With a population of 7.3 million, about 30% of the population is under the age of 14, creating a promising young market which provides opportunities for Hong Kong toy exporters.
About two percent of Israel’s total exports to the mainland of China are handled by Hong Kong. With its extensive network and good reputation in the Mainland, Hong Kong businessmen can become reliable partners in Israeli companies to explore the Mainland market, in particular the provision of high-tech equipment and technology for the modernization of manufacturing and service industries.
Extending the Israeli market also has some challenges that Hong Kong exporters must pay attention to. For example, the quality of consumer products in the country to a high demand; importers orders are usually less than the volume of goods but more models; the country’s sales season and festivals linked to the exporters to make every effort to meet the relevant holiday delivery deadline.
Expand the Israeli market
In recent years, Israel’s economy has grown by leaps and bounds, becoming a rapidly expanding alternative market in the Middle East. In view of English is very popular in the local, business practices and the United States and the European Union similar to Hong Kong for the intention to disperse the export business, Israel should be less barriers to the market. The country’s import regime is very open and most of its products can be imported without the need for a license, but it may be limited if the products come from places with no diplomatic ties, such as some Middle Eastern countries.
From 1948 to 1973 was the war of Israel. After the war, especially in 1977, after the Egyptian President’s visit to Israel, the relationship between the country and the former hostile countries has largely become normal. In addition, Egypt and Jordan have reached an agreement with the United States and Israel, in Egypt and Jordan qualified industrial zones (QIZs) products, to enjoy duty-free exports to the United States, the conditions are: from Israel, Jordan, at least 8% , The provisions of Egypt 10.5%.
With the Government of Israel striving to create economic opportunities, the unemployment rate has dropped significantly and low inflation has also helped to raise the real incomes of the Israelis. Imports of consumer goods into Israel, the total value of 5 billion US dollars in 2004 rose to 8.9 billion US dollars in 2008, a surge of 78% compound annual growth rate of 15.5%.
The financial tsunami has had a limited impact on the country as a result of Israel’s prudent regulation of the banking sector. The local liquidity is more abundant, the international banking industry to face the problem of derivative debt, generally did not occur in the country’s banking sector. However, Israel, like many other countries, will experience slower economic growth in the face of a sluggish external environment. In 2008, the United States and the European Union accounted for 33% and 30% of Israel’s exports, the country’s exports have been challenged by the adverse economic winds. However, Israel’s main economic indicator, S-Index, shows that while the country’s economic growth has continued to slow down as of December 2008, external fluctuations have not yet had a significant impact on the domestic economy. As a result, Israel is one of the best alternative markets for Hong Kong businessmen.
By virtue of human resources to create wealth
Israel’s small population, only 7.1 million, the land area is not large, the Government has encouraged local enterprises to develop high-tech products, expand the international market to promote economic growth. Israel has advanced military technology, among the world. In Israel, the high-tech industries involved in civil-to-civil technology are among the most prominent industries, including information and communications technology, homeland security, aviation and electronics. Given the relative scarcity of water and energy, Israel is striving to develop energy-efficient and water-based technologies and has reached a very advanced level.
Diamonds are another important industry. One of the world’s largest diamonds trading center in the Israeli city of Ramat Gan (Ramat Gan), adjacent to Tel Aviv (Tel Aviv). Diamonds are also the largest trade category between Hong Kong and Israel.
The alternative market in the Middle East
Among the Israeli population, the majority of Jews, about 76%. The Jewish tradition and culture have a crucial impact on Israeli consumer behavior, which is very different from the neighboring Islamic countries. For example, a number of Jewish holidays mark the beginning of the shopping season, while other Middle Eastern countries have a different shopping season. Gifts to relatives and friends is the Jewish tradition, meaning gifts and gifts in the Israeli market has great marketing space.
Demand for quality household goods, gift items, consumer electronics, apparel and related accessories is strong, creating a source of business opportunities for Hong Kong exporters who can provide the country with a uniquely designed and affordable alternative to the country’s growing spending power, Of practical products. In addition, Israel’s young population, over 50% under the age of 29, the formation of a large group of young consumers, but also a huge demand for toys (about 30% of the population under the age of 14). In all parts of Israel’s retail market, toy stores have a seat.
It is noteworthy that the Israeli cities have their own characteristics. For example, in the commercial center of Tel Aviv, residents are more receptive to bold and innovative designs, but in Jerusalem, where religion is strong, residents are more conservative.
Other business opportunities
In addition to the bright prospects for the Israeli consumer market, Hong Kong businessmen can also identify opportunities to partner with Israeli companies to expand the Chinese mainland market.
Given China’s manufacturing and service industries’ thirst for high value-added products and services, Israel’s outstanding R & D capabilities are in great demand. In the five years from 2004 to 2008, double-digit growth was recorded in the imports of Israeli hi-tech products, including electronic products (19.3% CAGR) and machinery (CAGR of 21.1%).
As Israeli manufacturing progresses up the value chain, local producers will outsource several low value-added services to other regions. The Federation of Israel Manufacturers noted that when outsourced manufacturing processes, the industry is very concerned about whether or not intellectual property rights are protected.
Risks and challenges
Although the Israeli economy has a bright future, the country’s market has several challenges. Due to the small size of the market and the high quality requirements of Hong Kong exporters, Hong Kong exporters are required to offer a wide range of styles to the country’s buyers, but the small size of each product will have limited economies of scale and the possibility of small- Bringing additional operating costs.
Israel’s import industry is quite specialized. Each of the few importers of goods, the procurement of various products do not compete for each other’s situation. As a result, exporters may find that their Israeli partners or agents often demand a price reduction and do not easily compromise.
Israeli consumers pay great attention to the three festivals, namely the December lighting festival, 3 or April Passover and the Jewish New Year in September, they are usually in these festivals to buy new products and gifts. Therefore, Hong Kong exporters should strive to meet the holiday delivery deadline to meet the shopping needs of Israeli consumers.
