E-commerce isn’t going anywhere. The sector has expanded dramatically in recent years. It accounted for 11.9 per cent of worldwide retail sales in 2018, according to Statista, and is predicted to account for 17.5 per cent by 2021.
As a result of this fast expansion, industry behemoths like Amazon, eBay, and Alibaba have emerged, whose strength is based on data centralization and supremacy.
What can be done to compete more successfully in the e-commerce sector, one would wonder? The solution is new technology.
Nokia, for example, was the world’s leading manufacturer of mobile phones in 2007. In the same year, Apple introduced the iPhone 1, and nobody now mentions Nokia? Apple is everywhere in the media. E-commerce is the same way. New technology has the potential to break monopolies. This technology is Blockchain!
This is why it is critical to comprehend:
Blockchain Technology and How it Works
So, first, let’s look at how blockchain technology works.
A blockchain is a distributed collection of blocks in which each new block contains all previous inputs and modifications.
Consider a global manufacturer who employs a blockchain strategy. The description of an object is kept on Blockchain after it is manufactured. This data can’t be hacked after it’s been released. This implies that forging these product specifications and passing a bogus product off as an original is impossible.
On the other hand, Blockchain provides a high level of data protection while preserving complete transparency at all levels.
Utilizing Blockchain Technology for Payment Methods
The e-commerce sector’s payment systems are far from ideal. Even using services like Skrill or PayPal does not guarantee that the money transfer will be quick and safe. As a result, the entire e-commerce payment strategy has to be overhauled.
The worldwide value of digital transactions is expected to reach $3,453 million in 2019, representing a 21.5 per cent yearly increase. This means that managing such a high volume of transactions without new technology would be more challenging for online merchants.
Furthermore, customer support employees increasingly prefer self-service to face-to-face encounters. This means that digital shopping systems must be equipped with best-in-class security features to secure data security while adhering to state requirements.
Secure Financial Transactions
Secure transactions are a top priority when it comes to blockchain technology.
According to Experian’s 2018 Global Fraud and Identity Report, 63 per cent of firms have been defrauded, and 27 per cent of customers are worried about visual security in blockchain transactions and will leave them if they do not appear to be secure.
Transactions: Cost-Effective and Efficient
The typical transaction charge for popular payment options such as PayPal or Stripe is 2-3%. However, they have recently begun to express a preference for increased payment processing costs. Smaller shops are in danger due to this predicament since they must raise prices to remain competitive.
The fact that blockchain-based transactions are free is a huge plus. As a result, this technology may be able to mitigate the danger to small internet merchants.
How? Several ready-made payment systems, such as ECoinmerce, seek to establish blockchain-based markets for your retail business model by implementing safe and quick transactions.
All supply chain participants (sellers and buyers) can profit from adopting ready-made systems:
Online Sellers: A digital shop is an advantage for online sellers. They can trace all acts within the business in real-time since their ownership rights are recorded on Blockchain.
Consumers: Consumers will be able to purchase products and pay lower transaction fees. For example, e-commerce has a function that allows you to execute frequent trades at a profit. It benefits both consumers and merchants since it will enable them to attract more customers and earn their loyalty.
Unlike traditional payment processing methods, e-commerce cryptocurrency enables purchases to be done without the need for intermediaries, chargebacks, or deceptive manipulations. One of the most severe e-commerce issues that encourage such manipulations is false positives.
The e-commerce industry loses $9 billion a year due to transactions that are mistakenly classified as fraud. The Blockchain enables the creation of a global whitelist that includes all trustworthy clients. Having such a whitelist will reduce false positives and, as a result, aid in the detection of actual fraud.
Furthermore, by including cryptocurrencies, the blockchain e-commerce business is more likely to appeal to millennials, who prefer peer-to-peer transactions over older generations.
A Sustainable Supply Chain Management
Blockchain e-commerce platforms have capabilities that go beyond online payments. The system may be used for any multi-step transaction, including supply chain management, on a broader scale.
E-commerce firms may attain the desired level of openness and traceability using blockchain supply chain management systems. Customers may track the status of current orders and follow each product back to its source. At the same time, supply chain stakeholders can keep track of in- and out-of-stocks and shipments and take quick action to resolve issues and detect fraud.
Consider the following example of how a blockchain-based track-and-trace system may be applied to the transfer of pharmaceutical items from a manufacturer to a consumer:
Alibaba has already put in place a blockchain technology to improve cross-border trading. Alibaba hopes to combine export and import data with Blockchain for e-commerce to record product provenance, shipping data, arrivals, and customs reports in collaboration with logistics business Cainiao.
Through the T-Mall smartphone application, Chinese shoppers may follow about 30,000 items from 50 nations. The e-commerce behemoth has also recently teamed up with PwC to build a food control system using blockchain e-commerce technology, minimizing the danger of counterfeit goods.
Reduction in Supply Chain Transactions Costs
In supply chain management, blockchain technology for e-commerce helps decrease costs in two ways:
One of the issues confronting the e-commerce business today is the authenticity and integrity of inventory data. Many inventory management systems for record-keeping use old databases and only allow for linear data entering. This can function until a source document encounters some unexpected behaviour.
When this happens, some businesses chalk it up to experience and get back to work. Such data alterations encourage immoral behaviours such as money laundering. The reason for this is that inventory data is centralized, making it easier to falsify.
Blockchain technology allows all data to be decentralized, securely stored, and transferred. You will gain the following benefits by incorporating it into your inventory management system:
The e-commerce marketplace is poised to be transformed by Blockchain technologies. Although we may have to wait a while to see these changes, they are unquestionably on the way. Aside from being speedier and cheaper, Blockchain allows most of the actions that current commerce systems enable without involving a third party, making it perfect for merchants.