4soft Use Cases: Blockchain In E-Commerce
E-Commerce thrives. Online sales steadily grow by about 20% every year. To sustain this growth, online shops leverage every possible technology that helps them to be more efficient and get ahead of the competition to sell more, faster and at better prices.
We have presented on our blog a number of Blockchain applications and use cases in Finance, Supply Chain and Healthcare, it’s time to discover opportunities that Blockchain creates for E-Commerce. Take a look, and imagine how you can use it in your business.
Blockchain Use Cases in E-Commerce
Of course, when we think about Blockchain, the topic of cryptocurrencies has to come up sooner or later - and that is because this technology is perfect to create a trustless value exchange system.
You can use existing solutions, such as Bitcoin, Ethereum and hundreds of others, or create your own currency to raise money and change it into a utility token, that will grant special rights to some of your customers. It can significantly cut the middleman costs, help you improve your cash flow and raise funding.
And of course, it gives your customers alternative - an additional direct, fast and efficient payment method.
Here is our gem - 4soft created such a system for one of our clients in Thailand. Let me describe it in greater detail.
Imagine that you have a couple of companies, that came up with an idea to create a loyalty system network. What will be the best system to handle that? They cannot trust each other in 100%, and using the help of a trusted third party might come with additional costs, that will jeopardize the whole project.
Blockchain allows this group of companies to grant each other a node in the network, that gives access to the data, permission to add own transactions, guarantees transparency and unifies the loyalty points, so the customer can spend them in any of the companies.
Here is a short video that describes our solution: https://www.youtube.com/watch?v=St3G-QtCuho
Of course, the loyalty system collects data on how people use your shop and allows you to create personalized offers and maximize your earnings. What is more, you can introduce your loyalty tokens in the form of an ICO, and collect additional funds this way.
Online reviews are unreliable and often just full of unjustified trash talk. With Blockchain, you can verify them better, and double-check if the review comes from a solicit source.
It gives your e-store better protection, but also gives potential clients more reliable data on your business. The authenticity of feedback can be a significant value for the customer and help him to make a purchase decision.
Supply Chain Management
Every shop has to master the supply chain to fulfill the orders in time. Efficiency and speed require perfect organization, communication, and tight processes. Faster, more accurate and reliable e-Commerce can build a better brand, and scale their business better.
It is the backbone of many industries. We wrote a separate article on supply chain management on a blockchain, so if you are interested in learning more, check it out.
Benefits of Blockchain in E-Commerce
In general, speed is not one of the pros of introducing Blockchain. Comparing to a traditional database, blockchain needs more time to react due to multiple nodes and the necessity for additional internal communication and validation.
However, if you compare it to international payments like SWIFT, it is still a much faster solution. You can get a reasonably quick transfer confirmation from the network.
There is no middleman in the blockchain network. You do not have to pay a central authority to take care of your transfers. The infrastructure is distributed between parties, and a properly designed blockchain will cut your costs.
You will hardly find a thing more important than security when dealing with clients’ personal data and their money. Blockchain allows you to store the data and process them safely, protecting them from frauds and hackers. It contributes to the safety of the whole process and increases trust.
On Blockchain, the database of your is secured by top tier cryptography. But this is just one aspect of its security - the decentralization protects your data from being lost. Even if you lose a couple of nodes, you can still have the complete set information. If you want to influence it, you would have to successfully hack multiple nodes at once, and this is very easy to spot and fight back.
Smart Contracts are programs that can run on your Blockchain. You can use them to automate your processes.
It gets even more interesting if we take a look at it in a bigger picture. For example, Smart Contract that runs on Ethereum is binding for you as the seller and your customer. It can include logic that protects you both from frauds as an independent judge.
Unification of data
Many companies have problems with incoherent data being scattered on multiple platforms. You can unify such things as loyalty points generated by various companies. On a single blockchain, they will achieve the same value, no matter what was their source.
Applications of Blockchain in E-Commerce
Alibaba is a very good example of an e-Commerce giant pursuing blockchain innovations. They are a leader in filling patents for solutions in this field.
To give you some examples: They plan to integrate the technology into their intellectual property system to let international brands easily fight for their rights in Chinese Internet courts and protect litigation rights. They use it to fight counterfeit foods. In partnership with PricewaterhouseCoopers Alibaba built Food Trust Framework to track the products all the way from producer to consumer.
Monetha is a fintech company from Switzerland. It utilizes blockchain technology to store information about a person, product and business.
Its main function is giving users access to relevant details before a transaction.
AORA is a buying platform for cross-border e-Commerce and crypto shopping. You can use it to purchase items from online marketplaces in the U.S. and China. You can pay with cryptocurrencies.
AORA purchases items on behalf of the user and handles the logistics It ensures that the items will get purchased and shipped to you. You might think that it does not bring extra value - but many people abroad are cut off from e-Commerce in those countries. It helps people buy stuff, but also helps sellers expand their market range and include foreign customers.
WOWTRACE solution is based on the supply chain management. It utilizes blockchain to track products and provide product information to consumers in real-time.
The system includes an interesting mechanism of radio-frequency identification tags and embedded sensors to enable tracking and keeping records on the products and their journey.
Walmart's China Blockchain Traceability Platform was built on the VeChainThor Blockchain. It was introduced with 23 product lines on board.
It is basically a supply chain tracking and management solution, that tracks products like fresh meat, rice, mushrooms and cooking oil.
Summary: Blockchain in E-Commerce
As you can see, there is already a lot of projects and companies that put a great effort into implementing blockchain technology in e-Commerce. In fact, it is very useful especially in this industry: it gives you the ability to transfer value, keep the data safe and increase the security of the whole process. That is the reason why giants like Walmart and Alibaba experiment with it to increase the efficiency of their business.
All that can help you improve user experience and be a strong ally in the fierce market of the modern internet. Even if you stick to the traditional models of online sales, it would be wise to consider new opportunities, such as those based on cryptocurrencies. They can help you keep up with that pace, or even get ahead of the competition through innovative solutions.
We can apply this technology to your business
Our team delivered a number of similar projects for clients in the US, Switzerland, UAE, Thailand and Australia. Simply let us know that you are interested in exploring this, and we will contact you with the details.
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