Shanhai 9Diamond Jewelry Co, which sells diamonds online, said yesterday it has raised a combined venture capital investment of more than US$10 million from four firms and it plans to issue an initial public offering within three years.

The Shanghai-based firm sells diamonds with certificates and receipts directly online. Its products are often 30 to 70 percent cheaper than similar products sold in stores.

The four investors are Qiming Venture Partners, Zero2IPO, US-based online diamond trade firm Rapaport, and Kleiner Perkins Caufield & Byers (KPCB), which has former US vice president Al Gore as a partner.

Revenue for 9Diamond in 2007 was "several million dollars" and it plans to float its shares in Hong Kong, on the Nasdaq or on the coming domestic growth enterprise market within three years, Chen Bin, the company's chief executive told the Shanghai Daily yesterday.

The company sells rough diamonds, diamond rings and other products in auctions starting at 1 yuan and rising to more than 400,000 yuan (US$55,555).

"The diamond website is another Dell or PPG in the jewelry industry," said Cindy Wang, an analyst at Shanghai-based Internet consulting firm iResearch Inc. "It uses the direct-selling model, which has grown rapidly in this country with 210 million Internet users.''

Chinese netizens' online spending reached an average 1,020 yuan in 2007, up from 600 yuan in the previous year, according to iResearch.

Wang said the major challenges for the diamond website were whether they were seen as reliable and whether they provided a comfortable consumer experience.

The 9Diamond company offers online payment services, delivery service insurance and authorized diamond certificates. It has also opened customer-experience centers in major cities, according to Chen.

(Shanghai Daily, February 27, 2008)