Israelis Use Eilat VAT Exemption to Upgrade Purchases, Zap Data Shows
Zap analysis shows Israelis use Eilat's VAT exemption to upgrade purchases rather than save, eyeing premium models and brands that cost 16% more on average.
Israelis visiting Eilat are using the VAT exemption not to save money, but to upgrade their purchases, according to a data analysis conducted by Zap Price Comparison for N12. Consumers checking prices for Eilat purchases look at items that are roughly 16% more expensive compared to the same categories in the rest of the country.
The gaps are particularly striking in top Eilat shopping categories, notably smartphones. The median price gap exceeds 450 shekels in the smartphone category: the median price for a device checked for Eilat purchase is 2,700 shekels, while for a standard purchase it is only 2,220 shekels.
For smartphones, 40% of clicks on Eilat purchase offers are for premium models, compared to 23% in standard shopping. Cameras checked for Eilat are 24% more expensive, vacuum cleaners are 21% dearer, and drones cost 30% more. Apple products account for 35% of product views around Eilat offers, versus about 3% in regular purchases.
Zap executives note that the VAT exemption transforms from a tool for saving into a lever for upgrading, as explained by Oshrat Cohen, VP of the customer division. Instead of buying the same product cheaper, consumers choose an upgraded model or a dream brand within their originally planned budget.
