The Azrieli Group has announced the closure of its e-commerce website, Azrieli.com, following significant financial losses. With approximately 70 employees working on the site, the majority of them will be laid off.
The Azrieli Group expressed its regret, stating that "Unfortunately, we had to bid farewell to most of our dedicated staff members, with some being integrated into other projects within the group." The website will continue to operate until the end of December.
Overall, the company lost an estimated NIS 300 million from the website throughout its years of operation. The group launched Azrieli.com in 2016, hoping to generate additional revenue to complement their physical stores across various locations.
Why is the Azrieli Group shutting down its e-commerce site?
Explaining their move to shut down the website, the Azrieli Group said that "Our decision is based on a thorough evaluation of the e-commerce market in Israel, which still lacks sufficient development. Furthermore, the presence of global websites in the market significantly hinders the growth of local websites. In addition, local regulations tend to favor international websites, such as the VAT exemption exclusively granted to them."
The group further added, "despite our efforts to adapt our product offering to meet the preferences of Israeli consumers and revamp our entire technological infrastructure, we have not witnessed a substantial market demand that justifies further investments in this field.
"Nonetheless, the Azrieli Group remains committed to investing in digital and innovative ventures, leveraging the extensive technological and digital expertise we have accumulated over the years. Daniel Koren, the current CEO of the trading site, will lead these activities."