How is Blockchain Transforming the Ecommerce Industry?
The e-commerce domain has expanded at a phenomenal pace with an increasing number of brands and organizations jumping on the bandwagon. But even with so many players, there are a handful of players that have gained a monopoly in terms of sales, customer and supplier base, as well as user data. Leading companies like eBay, Amazon, Alibaba, eBay and some others control over 50% of the industry which is leading to serious problems related to payments, supply chains, data security, ethical practices, supplier best practices and consumer interests. The existing model for e-commerce businesses will be unable to solve such problems with the swish of a wand. In such a scenario, Blockchain technology seems to be a good solution.
Technological innovation has usually always triggered disruption that has broken down monopolies. Blockchain helps decentralize control and takes data ownership back to the user, thus completely changing the way business is done. Could Blockchain be that disruptive technology that will level the monopoly currently enjoyed by leading e-commerce companies?
One of the more obvious use cases for Blockchain in e-commerce is the use of cryptocurrency as a means of more secure payment, and that too without any fees. Defying expectations, cryptocurrencies have become fairly popular as a form of payment in mainstream e-commerce. There is still a lot of gaps that need to be filled. Cryptocurrency may not ever replace cash and cards as a mode of payment, but more and more outlets are beginning to accept Cryptocurrencies as payment. What’s evident is that crypto currencies wouldn’t be possible without Block chain technology, and using them for commercial purposes offers several benefits, including fewer instances of fraud due to more rigorous authentication and security measures, and no need for fee-hungry third party processing agencies. The rising popularity of user-friendly digital wallets has helped pave the way for new users, and the inclusion of crypto-based payments into mainstream e-commerce. This, in turn, could allow retailers to attract a new, largely untapped segment of crypto-inclined consumers.
Block chain technology offers greater security and anonymity. There is no central controller of data collection and managing, as we typically see on shopping websites, social media platforms etc. Block chain puts the power of data control in the user’s hands, ensureing that they are free to either sell that data to interested third parties or simply own it and protect their privacy. Let’s look at the difficulties that are facing the e-commerce domain and how Block chain can be useful.
It’s not news that payment solutions in e-commerce are riddled with issues, despite security gateways like Verizon or easy-to-use platforms like Skrill and PayPal. The payment methods available these days charge a steep processing fee, while retailers also need to pay high charges to the e-commerce website on sales made on the platform. This means that the final price of something you buy online includes at least a markup of 2-3% in any transaction. Request Network and E-commerce are some Blockchain projects that are enabling secure, simplified transactions for any e-commerce business model. These projects also want to leverage Blockchain for all payments and monetary exchanges in the e-commerce domain based on ironclad security measures to ensure a high-quality customer experience.
Supply Chain Management
For any e-commerce organization its suppliers are one of the most prized assets, and thus it needs to be glitch-free, smooth and fast-moving. Blockchain technology can help create an honest view of the supply chain because of the inherently open and free nature of the technology. Because the information that has been verified on the Blockchain is not false, it can help manage the supply chain and address several issues. A verified Blockchain network can enable a transparent supplier network and exchange, with customers being able to track their orders and purchased products, thus increasing consumer confidence. From the supplier perspective, they can be sure that their products stay true to quality and are not damaged or tampered with.
Another key problem bothering the e-commerce industry is data storage and security. Almost all e-commerce platforms hold large amounts of data, especially tons of data related to customers and retailers. Typically, customer info is kept in central servers where it is prone to cyber criminals and data breaches. There are many e-commerce brands that have already been got by cyber criminals who have stolen large amounts of data. But in a Block chain based marketplace, it is almost impossible for miscreants to successfully breach any servers because the data has been decentralized. It will take a cybercriminal an unimaginable amount of time to breach all the nodes of a Block chain network, which means customer data is secure on a Block chain-based marketplace.
There have been many complaints recorded against leading e-commerce players by other retailers. Even established companies have been accused of lack of transparency and unethical practices such as removing direct interaction between customers and suppliers and even disabling a merchant’s website with little or no explanation. Meanwhile, Blockchain-based e-commerce sites like Bitboost provide 100% transparency into their operations because they are essentially decentralized marketplaces that enable transactions in a glitch-free and honest manner.
Now that consumers are becoming aware of such benefits and several suppliers and retailers have experienced the advantages offered by Blockchain-based e-commerce stores, there is a push from all these centres to leverage Blockchain to help solve the inherent problems of the e-commerce industry. Leaders such as Amazon, Alibaba, and eBay have already begun working on Blockchain research and development while retailers like Unilever and Walmart are thinking of Blockchain-based marketplaces for their products. They all have one common objective – leverage Block chain technology to solve the issues their current e-commerce platforms face, and to solve these issues as soon as they can.
Talking about the future, Blockchain combined with AI will even allow e-commerce platform users to facilitate system interactions in a better and more automated manner. Reviews and incentive programs can also be seamless.
With e-commerce reaching unanticipated levels despite all the issues faced by current portals, an evolved industry facilitated by Blockchain can reach unprecedented heights with revenues and transaction as never seen before, and that too with more satisfied suppliers and customers. The eCommerce industry will perform better and will be incorruptible one as Blockchain continues to infuse itself. Blockchain can the move e-commerce industry towards faster, less expensive, and more secure transactions.
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Block chain's complete potential is yet to unfold even as sellers and financial institutions are opening up to adopting the technology for faster, easier and more secure payments. As more players and buyers warm up to Blockchain and begin using it, the e-commerce industry will grow even faster.
Published Date: Aug 06, 2019