The treasure tycoon

Jacques Voorhees.

"The jury's in, it's happening, just accept it," says Voorhees, asked whether people are prepared to buy diamonds over the internet. And he could well be right. While his self-made Polygon empire has sold pieces of jewellery worth up to US$70,000 over the internet, last year a diamond worth US$250,000 was bought online. Meanwhile, across the world, online jewellery sales are rapidly increasing. Last year in Voorhees' native US, while total jewellery sales climbed by 7%, online sales soared by 20%. And, according to the American entrepreneur, the GCC is set to establish itself as one of the world's most lucrative regions in the sector. "The GCC could become one of our most lucrative markets with all the oil revenue, and also there aren't the established supply chains in much of the GCC like there are in the US or Europe," he explains.

"If you go to a retail jeweller in the US, they know how to get hold of diamonds but in the GCC they might not. For GCC retailers we could leapfrog the technology so instead of having to forge various different relationships, they can just log on to Polygon," he adds. Currently, Polygon's Eastern hemisphere operations covering Asia, Africa and Russia are part owned by the Dubai Multi Commodities Centre (DMCC). "The DMCC is the key partner in our expansion policy. We see our growth in Asia and the DMCC's focus is also there. They have the resources and the power and are the perfect component for us," Voorhees says. It was back in 1975 that a young Voorhees launched Polygon - it has since grown to be the largest online jewellery trade business in the world with an inventory of over US$2bn of gems and jewellery listed daily.

Voorhees made the decision as a teenager to enter the diamond trade instead of becoming a pilot. He eventually began grappling with limited technology to create an early jewellery trading system. "The young generation has a hard time believing there was a world before the internet but things evolved through different levels of technology," he says. "Then we evolved to the satellite-based transmission of data, so we were literally going round installing miniature satellite dishes in stores all over New York City - that was just terrible."

Thankfully for Voorhees, modems were invented and they revolutionised his business, although he admits that, in the early days he had to mail people free modems just to enable them to access Polygon. Then came the invention of the internet - something that "terrified" Voorhees. "I panicked and thought ‘Polygon is toast!' So we started inventing other things [like] a password protection system and we became the largest provider of websites in the industry."

Admitting that the arrival of the internet put the emphasis of running a business on marketing as opposed to technology, Voorhees recalls his battle with a fellow e-entrepreneur.

"One guy spent US$20m trying to put me out of business. He had venture capital and his plan was to take Polygon's share of the market.

"But after that dotcom stuff, if you didn't have a real business you went out of business, so then all our competitors disappeared and he ran off."

Today, Polygon has a presence across the globe having pioneered its own subsection of the jewellery industry. According to Voorhees, the emergence of the online jewellery trade has been so rapid that it has caused widespread panic across America. "I was asked by a retailer today, what the answer was to trying to compete with the internet. The first step is for them to realise that they have to answer that question. I don't necessarily have the answer but what is tragic is that so many independent stores are not even asking the question," he explains. Voorhees believes that the key for retailers to compete with online enterprises is to move away from the assumption that the customer doesn't have the same industry knowledge as the retailer. "Jewellers are now saying ‘my customers are getting the prices on the internet, they know the prices, this is terrible'."

One obvious advantage that retail stores have over the online sector is that customers have the opportunity to try on various pieces of jewellery. Voorhees however, doesn't see this as enough to save businesses that fail to embrace the internet. "Thank goodness people do still want to see things up close and touch them because that's the only thing that's left," he says. "Otherwise I think 100% of sales would have gone to the internet by now. Voorhees also predicts that the ongoing technological development of the internet will further enhance the online shopping experience. "Online customers can now see diamonds at 40 times magnification, they can see any tiny flaws that may not otherwise be visible under the counter," he adds.

No doubt, with the rising tide of cybercrime across the globe, online jewellery traders could be at risk from counterfeit goods. According to Voorhees however, the emergence of internet trade has actually increased customer awareness of counterfeit goods and made them less likely to fall victim to crime. The Middle East is still a developing market when it comes to the internet and penetration is far from full capacity. Voorhees believes that this will all change in the near future. "It took decades to develop the online world in the US but I don't see other parts of the world, like Dubai or China, lagging behind anymore," Voorhees adds.

If Voorhees and his vision of the future are right, the days of the jewellery retailer could be numbered. As internet security and with it customer confidence improve, traders and consumers may increasingly rely on services such as Polygon. And the retailers will have to adapt to survive or face being wiped out by the online jewellery revolution.

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