One could say that the term "Electronic Commerce" (e-commerce) was first coined approximately 14 years ago, with the launch of the international American commerce juggernaut eBay.

But while eBay surely did bring about the change, the first company that allowed purchases through the Internet was actually Pizza Hut, via its Internet website in 1994. In the early days of the Internet era, who would have imagined that in such short a timeframe, e-commerce would be the latest thing in describing globalization. In the U.S. alone, e-commerce has reached an annual yield of 204 billion dollars, a rise of 17% compared to 2007.

Who would want to buy a diamond ring, a diamond bracelet, diamonds in bulk or even raw diamonds through the Internet? With unclear security procedures and policies and a constant fear of identity theft or untrustworthy merchants that might not deliver the goods, we all approached the e-commerce sites with certain fears. With the willingness of credit card companies and the launch of accompanying security services such as PayPal, e-commerce has become obvious and renewed the international commerce arena.

In one of my recent posts that I wrote and dedicated to China, I wrote about the growing diamond and jewelry market in the country, which is climbing alongside an aggressive rise in local supply and demand. The Chinese market is destined to surpass the Japanese market soon, with it being the second largest diamond and jewelry market in the world following the U.S. Recently, significant letters have been signed between the Israeli diamond industry and the local industry in Panyu, China.

The first Chinese version for electronic commerce between businesses (B2B), Alibaba.com, has become a showcase of merchandise manufactured in China and in Asia for wholesalers and retailers in these countries and around the world. The company has won several prizes and its worth stands at almost 100 billion dollars – more than 3 times that of eBay. Now it looks as though the international e-commerce arena is undergoing an additional facelift and perhaps a new revolution: the e-commerce site TaoBao, intended for the Chinese market.

Robin Niu, a top cosmetician and celebrity in China, has decided to promote her new cream though the e-commerce site TaoBao, a part of the Alibaba.com group. The launch of the product on the Internet was done following 4 years of research and since September, more than 1,000 bottles of the Jing Chang cream have been sold through Nius' flagship store in the mall, the business-consumer platform TaoBao, which went up on the Internet in April this year. According to Niu, "the market price of the new cream should be around 660 Yuan (87.89 dollar) per bottle, but the cream sells on the site for only about 320 Yuan. All of the profits from selling the new cream will be transferred to the Chinese Red Cross and at the same time I will be able to supply quality products to all of my fans who supported me throughout the years”.

TaoBao's commercial for Christmas and the holiday season

Daniel Zhang, financial assistant director general for TaoBao, says that approximately 100 million customers are registered on the site and that it competes head-to-head with the American public sales juggernaut eBay. According to him, "we can know what the customers prefer and what their shopping habits are via the information that the site supplies every day. The word "Niu" is among the more popular words in the sites’ search engine, a fact which reflects the great favor that the customers hold towards Robin as well as her market potential".

Zhang added that businesspersons such as Niu can receive quick reedback from the sites about their sales, in order to change and accommodate their products and every other aspect of the marketing process. Zhang also referred to the global recession and said that it hurt businesses and consumers. “In order to deal with the “economic winter”, many corporations chose TaoBao in order to maximize their profits, in a time when consumers are looking to buy products for cheaper prices”, he added.  

TaoBao can save businesses up to 20% of the costs of establishing marketing and distribution lines as well as about 20% of their operational sales costs. In the last year, many international brands such as HP, Lenovo, Proctor & Gamble (P&G) and Disney have opened up flagship stores on the website, where more than 1,000 different entrepreneurs are active within it. Uniglo, the retail giant from Japan which sells cheap Kashmir sweaters, earned 300,000 Yuan on its first operational day on TaoBao in April 2008, and its sales throughout the first year of site operation have reached about 150 million Yuan.

The sales of worldwide computer giants Dell and Lenovo reach about 2 million Yuan each this April. “We have a customer base of more than 100 million users, which many businesses can reach to. One does not need to spend much money searching for sales and advertisement channels, but simply needs to get the consumers to know that your product is here on TaoBao - and they will reach it themselves", he said. In the first half of the year, the TaoBao website reported a sales extent equal to nearly 80.9 billion Yuan, almost twice the overall sales last year.

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A guest post by Iris Hortman, IDI's information officer.

During an ordinary evening this week, just as my family and I were set to start our dinner, my 14 year-old son stormed into the house, and as he normally does, flew straight to the computer. He was holding a new computer game he had jus bought and refused to join us at the dinner table until he read what people said about the game. I didn't understand and asked him what he looked for on the computer. Of course, after the usual shrug I got from him, he told me he was reading in a gaming website what other people thought about the game he had just bought. He told me that "many people said the game was 'rad' and he is relaxed and could now eat his dinner at peace.

What is a social network?

A social network is a group of people who maintain contact between them bound by a common interest. Social networks have been in existence for a long time because the need for social bonding is a necessity for all humans. In fact, social networks have existed forever in the form friendships, sects, political parties, trade unions, etc. The Internet just made it all very easy and accessible.

How do you join a social network? All you need to do is pick one (or more) of the leading websites, sign up, list all of your friends, they will list off of their friends, and before you know it, you are a part of a brand new social circle. Each member can post and share on their homepage items such as messages, videos, photos, fan clubs, events etc, using the network's platform.

Most social networking websites are divided into two categories: community networks and business networks.
Business networks have great business potential and allow for unmediated networking for business purposes. The business network allows business owners to promote their business in a variety of ways both to prospective clients and to other businesses.

It can serve as a giant conference room where everyone can consult and communicate on business issues directly with one another and with no regards to the distance from one another. Joining a network is free of charge, so each jeweler or retailer can expose their business to thousands of potential clients, especially to a younger crowd which spends most of their money on engagement rings.

Advertising on the street? Come join the social media!

A study conducted by an American internet marketing research company found that the use of social networks is mostly done by relatively young age groups – maybe not the ideal target for jewelry sales – but they are the next generation of jewelry buyers. The age groups of 35 and younger serve as the heaviest users of the Internet and of social networks both in order to gather information and in order to make purchases.

In many cases, young people don't even physically reach the stores. In this case, social networks have been growing in popularity mainly because those people use them to hear what others say about the product they want to buy. It boosts their confidence during the purchase. A retailer, jeweler or diamond dealer can open a "fan page" and allow members to join the page as a "fan" of the brand. The Tiffany Company recently opened a page on "Facebook" in an effort to reach fans of fine jewelry around the world. So far, 124,000 people visited the page, which was opened only a month ago.

"Conversation Marketing" is also another up and coming marketing tool that that has lately been creating a "buzz". Through Conversation Marketing, businesses use social networking tools such as web logs (blogs), chats, instant messaging, etc, in order to promote a product or a brand. The idea behind it is revolutionary: turning the relationship between the merchant and the client from a one-way street to a two-way street in a way that allows real dialogue to develop between the two sides.

Despite all of the commercial and marketing advantages of social networking, any merchant or business owner must be aware of the risk they are running when using social networking. Because the basis of these networks is social, it is important not to "cross the line" between legitimate use for the purpose of communicating with and better understanding potential clients, and manipulative and deceptive behavior for commercial purposes.

Photo Credit: moriza & Rosa y Dani

The Israel Diamond Institute Group of Companies (IDI) launched yesterday a groundbreaking Russian version of the Israeli Diamond Industry Portal, the ultimate B2B website for the Israeli trade market.

"This is an historical moment", said Avraham (Bumi) Traub, Chairman of the IDI Finance Committee and Honorary President of the Israel Diamond Manufacturers Association, who presented the website at a press conference in front of dozens of journalists at the Sheraton City Tower, At Ramat Gan's diamond district.

IDI's Russian website, the only one of its kind operated by a diamond center, is launched two years after IDI had successfully launched its Chinese version, which was also a first for the industry.

Bumi Traub, Chairman of IDI Finance Committee and Honorary President of IsDMA

Traub said during the conference that Israel today is the world's leading diamond center, with major markets in the USA and Hong Kong. "We want Russia as well. If the tax for diamonds in Russia will ease up, it will allow the entry of new products from Israel - and will help buyers and clients", said Traub, who was a pioneer in the Israel-Russia business trading back in the 60's. "For me - Russia is a super-power. After the tax reduction in Russia, I believe we will have plenty of business to conduct there", Traub added.

It seems the Israeli diamond industry portal is the leading online diamond information and trading center. Israel's strong high-tech character reflects on its diamond cutting and polishing technology as well. "Here in Israel we create the majority of the diamond cutting and polishing technology. New generations are advocating new technologies", Traub said.

Russian media representatives at the press conference 

Concerning the global crisis, Traub told the press that the financial crisis has hit the industry, just like in the 30's. With an optimist tone, he added that "From the end of January, diamond prices rose about 35%", which definitely gives a boost to the industry. 

"The portal is free, accessible and with 5-7 news items on the jewelry and diamond industry posted each and every day", told the press IDI Managing Director Eli Avidar. "We have more than 113,000 users' entries each month, with total of more than 1.2 million viewed pages. The new Russian website has a huge potential to become a central business platform on a B2B basis. I believe that the website will be highly successful.”

Eli Avidar, IDI's Managing Director

"Our vision is to bring the industry news to people from Novosibirsk through Moscow and all the way to Odessa", Avidar summarized.

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