Ten Years Later

It may seem obvious – and commonplace – today to trade diamonds over the Internet and to use the web in every aspect of business, but 10 years ago, when IDEX Online was still just a hint of an idea, the Internet was still just a novelty. But it was a novelty that caught the idea of Ehud Cohen, chairman of IDEX Online, and Tamar Katzav, the company’s chief operations officer, who together founded IDEX Online a decade ago.

At the time, Cohen, a second generation diamantaire was just about to retire from the diamond business altogether and Katzav, who had worked as a polished trader, had already left the trade and was travelling through Africa. Then came what Cohen terms, “the Internet craze.”

“New ideas and new horizons have always intrigued me,” he says. “In the emergence of the Internet, I saw the hidden potential of the next big thing.” But while the potential was there, the question was how to combine their collective knowledge of diamonds and bring real added value to the industry.

“We saw that there was no such thing as an international diamond exchange,” says Katzav. “We created a business model and consulted with many diamantaires about whether the idea would work. Some told us that it wouldn’t.”

Nevertheless, the pair persisted and after extensive market research, they decided to run with the online exchange idea and set up the first office in Ramat Gan in 2000. “We bought Diamond Link, a print business that used to issue a list of demands and requests to its 150 members and we put that online. That was our base. We had the requests and once people uploaded their stock, we had an exchange,” says Katzav.

Offices in the major diamond centers of Antwerp, New York, Hong Kong and Mumbai followed in quick succession. But it was not always easy attracting people to add an online facet to their business. “Many people didn’t even have a computer then, let alone access to the Internet. We concentrated on people who were on top of technology.”

“The main obstacle was convincing people to upload their stock,” says Cohen. Old habits die hard, and the tradition ways of doing business are, for some, still the only ways of doing business. Slowly, however, traders began to accept the online exchange idea, though uptake was quicker in some centers than others.

“Ten years ago, traders didn’t want retailers to know their prices. The feeling was that it was important not to expose our stock,” says Katzav. “Today that mentality has changed.”  

“When we started the company,” says Cohen, “we wanted to connect the upstream with the retailer. Adds IDEX Online CEO Abraham Stern, “Today, with close to 10,000 traders online, most of the industry stock and our agreement with eBay we have fulfilled that intention.“

As for the future of the company, Cohen says he envisages IDEX Online becoming a one-stop-shop for the whole industry. “We want to give a total solution for diamond manufacturers to reach the retailers in a transparent system. Through this transparency, confidence will increase, as will the size of the industry, leading to new money coming into the business.”