FYI, this is not an anomaly. In Israel, amazon did a deal with the national postal service that gives amazon packages priority. Before that, Aliexpress' free delivery ruled. It's easier in Israel, because there isn't a local amazon to compete with faster shipping.
Long story short, local businesses pay much more, for slower local delivery than global companies shipping internationally. This is on top of de facto exemptions from duties & product regulations.
Israel is a tiny country. Geographically, it's a city state. Local ecommerce is not viable because international is cheaper, faster & has extra advantages.