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Business Envoy May 2022

Israel: A flourishing tech sector and consumer market

Spend a day walking around Tel Aviv and you are guaranteed to spot a pair of Tasmania's Blundstone boots on a busy sidewalk, a surfer on their way down to Gordon Beach sporting a Billabong wetsuit, or a packet of Arnott's Tim Tams in any local supermarket. Despite relatively modest export figures, Australian brands enjoy sustained recognition and affection in Israel. This bodes well for Australian companies with an interest in entering the burgeoning Israeli market.

Israel's GDP grew by 8.1 per cent in 2021, powered by its robust tech sector, rapid innovation and commercialisation of R&D. This was reflected in the momentum sustained through 2021 with a record year of investments (Israeli technology companies raised USD 26.6 billion last year) and more than 30 companies reached unicorn status.

Australian companies that can help fill gaps – health and medtech, agtech, water tech, and green tech – are well positioned to take advantage of opportunities in Israel's world-leading tech ecosystem.

Paul Griffiths, Australia's Ambassador to Israel

Despite a modest population of 9.5 million, the Israeli market punches above its weight in consumption and spending. GDP per capita is currently US$44,000 and on an upwards trajectory. Increased disposable income has been accompanied by demand for new and innovative products. With a value of US$34 billion per year and an annual growth rate of six per cent, Israel's food and beverage market presents opportunities for Australian companies that can offer a differentiated product in packaged food, nuts, health, organic and sustainable products, and non-alcoholic beverages. There is also growing appetite for personal care products, including cosmetics, skin care, and nutritional supplements - and Australian companies are making gains.

In addition to Blundstone, Arnott's and Billabong, Australian companies servicing the Israeli market include Redback, Ryderwear, Everdure, KAS Australia and Uppercut Deluxe. Beyond consumer goods, medtech company Cochlear provides hearing devices, Northwood Exploration is developing the largest oil shale project in Israel, ANCA supplies tool and cutter grinders and investment firm Square Peg Capital provides funding to startups.

There is a clear appetite from both Israel and the broader region to attract more trade and investment from Australia. New trade relationships between Israel and the UAE, Bahrain and Morocco will enable better connectivity within the region and for Australian exporters.

Israel has strong links to the United States, Europe, and Africa, so Australian companies must offer a unique product that can compete on price. We should play to our advantages: the Israeli market recognises Australia as being a producer of high-quality products and services which adhere to the strictest standards.

The Austrade team in Israel, based at the Australian Trade and Defence Office in West Jerusalem, is available to assist businesses navigate regulations, import procedures, kosher certification and freight costs. And business groups – such as the Australia-Israel Chamber of Commerce, the Israel-Australia Chamber of Commerce, and the Trans-Tasman Business Circle – regularly arrange delegations to Israel. With a bit of “chutzpah”, our Tim Tams will be in good Australian company in the Israeli market.


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