Blockchain is increasingly shaping our future. It is arguably the most powerful technology during the infamous fourth industrial revolution, mainly because of its capability to disrupting a variety of sectors. For example, recently we presented you with 5 examples of blockchain in the supply chain, now is time to look further into the e-commerce sector.
What is E-Commerce?
As one of the biggest e-commerce platforms, Shopify, describes it:
“Ecommerce … refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.”
Furthermore, according to Statista, e-commerce has been growing rapidly and is expected to become a $4.88 trillion market in 2021. Interestingly, according to Statista, desktop computers are still the most popular devices for making online purchases. However, there is a new trend heading our way and that is mobile commerce, or m-commerce. In other words, smartphones are increasingly replacing desktop devices as preferred weapon of choice for shooting an online order.
In any case, m-commerce is in many ways part of the e-commerce industry, only the device used for online transactions is different. So let’s dive into how blockchain can change online commerce entirely.
How Blockchain will improve the E-commerce?
Blockchain is bringing higher security and transparency to e-commerce. Moreover, the current payment systems are still far from being perfect. To begin with, they require high processing fees. Furthermore, e-commerce platforms also charge retailers for each transaction happening on their websites or mobile apps. Because of that, the payment industry should take advantage of the blockchain technologies.
Request Network is an open network for transaction requests. It provides retailers, governments and financial institutions with a secured and decentralized way to execute payments no matter what the currency is.
Ecoinmerce is an entire e-commerce platform based on blockchain tokens. An open community platform where everyone can jump in and sell or buy things. Most importantly, sellers and users own everything they upload on the platform. When buyers leave reviews, share deals with their friends and family, they receive ECN tokens. You can see how it works on the video below:
Blockchain is already heavily introduced in supply chain management. Because of that, e-commerce can also benefit as it depends largely on good supply chain networks. Introducing blockchain technology within the supply chain, which can help users better track their orders when buying anything online. Furthermore, it will bring transparency to the marketplace, because with blockchain users can follow the goods from all the way from manufacturer to the retailer. At the same time, retailers will be able to keep track of their stock and make better sales forecasts.
A good example of introducing blockchain technology to shipment tracking is Alibaba’s Tmall e-commerce platform. With the help of Alibaba Cloud’s blockchain technology, Tmall users will be able to track their orders in Luxury Pavilion. All they will need to do is to scan the QR code on the package and they can trace the product’s origin, its time of declaration for entry, its blockchain code and more useful information. This is possible as every product on the blockchain has a blockchain “ID card”, which the customer can then verify.
Another difficulty that e-commerce is facing is keeping track of inventory. Retailers usually do not update their stock records in a timely manner, and therefore they experience shortcomings. This could further be a prerequisite for illegal actions such as forgery, money laundering and corruption. Luckily, blockchain technology is applicable to different management systems, so it can easily solve that problem.
How is blockchain technology able to accomplish that? To begin with, the data in the blockchain is decentralized. This means that a single person cannot make modifications since all other entities in the network needs to verify the new entry. Furthermore, the data in the blockchain is encrypted, therefore it is very difficult to manipulate in a malevolent manner.
False Product Reviews
Customer reviews drive sales on e-commerce platforms. The more positive reviews a retailer has, the more they sell. Furthermore, reviews also determine ranking position and where the retailer will appear on the e-commerce platform. Therefore, there are a lot of companies that pay other people to write positive reviews about their products. This, of course, is a well-known fact which also discourage people from buying products online as it is diminishing their trust.
Again blockchain technology comes to the rescue! Blockchains don’t allow new data (reviews) to be added before it has been verified by the blockchain network. And after a review has been approved, it can’t be modified or tampered with. Implementing blockchain solutions for customer reviews will raise the credibility of the e-commerce platforms, which will then lead to increased customer loyalty and trust.
Payments will always be at the very core of any e-commerce platforms. But your credit card number is not the only sensitive information that you need to fill in when making online purchases. Platforms usually require you to make a profile by filling in your name, bank details and shipping address. Additionally, blockchain technology increases cybersecurity of the platforms as the data is stored on decentralized servers. This makes it difficult for hackers to attack all the nodes on the chain.
One example of computational protocol that further improves the blockchain is Enigma. It solves two of the biggest concerns regarding blockchain – privacy and scalability. With the help of the Enigma protocol, blockchain smart contracts turn into ”secret contracts”, in thereby increase data privacy. Additionally, the protocol acts as a second security level on top of the blockchain.
Blockchain solutions are certainly changing the way industries operate. This is, of course, a change for the better. Even though blockchain technologies still have their limitations, they are improving every single day. The advantages are many, most notably bringing transparency, security and reduced costs to the epic and growing e-commerce industry. That’s why you should keep a close eye to the constantly evolving blockchain solutions for your business. One way to do that is by signing up for our newsletter.