How blockchain will transform the e-commerce industry over the next few years
Blockchain technology should be considered the most disruptive technology invention of the fourth industrial revolution. The world has never seen a technology as powerful as blockchain technology and it could potentially impact all sectors of the economy complete will transforming it through top notch efficiency.
Recently, blockchain technology has been employed in different sectors of the industry ranging from the financial services sector, to the energy sector, from logistics to supply chain management, from the health sector to the gaming industry, and is even being used in online gambling.
However, the sector it is aiming to transform, and hopes to have the highest impact on day to day consumer and seller activities, is the e-commerce industry. The e-commerce industry has arguably changed the way we shop and live, which to many people has basically become one in the same.
The convenience, affordability, and vast array of products offered by e-commerce platforms shows some of the benefits of the e-commerce industry, but with the growth of the industry (a global online retail market that is expected to surpass $4.5 billion by 2020), large e-commerce companies like Amazon, Alibaba, EBay and a large group of other companies which account for over 50% of that market valuation, the problems associated with e-commerce are beginning to emerge.
Some of these problems relate to payments, supply chain management, data security, transparent marketplace, satisfied retailers, efficient management systems, and satisfied consumers. The current e-commerce business model will have a hard time resolving all these issues in one fell swoop, with the only solution to these problems is blockchain technology.
In this section, I will highlight the different issues faced by the e-commerce industry and how it will be solved through blockchain technology in the near future.
1.Payments
The payment industry will greatly benefit from blockchain technology, just like the financial services sector has. Payment solutions for international e-commerce is far from perfect, and even with payment solutions like PayPal and Skrill, the payment industry still needs some reworking.
Using current payment methods comes with high payment processing fees coupled with the high fees charged by e-commerce platforms on any sales made by retailers using their platform. These fees often start from around 2-3% of the total purchase price of any transaction.
Blockchain e-commerce projects such as Request Network and ECoinmerce have an aim to create a blockchain based marketplace using fast and secure transactions for any e-commerce business model. Request Network also wants to utilize blockchain technology for the financial transactions aspect of the e-commerce industry by providing low cost financial transactions, high security standards, and an overall amazing customer experience.
2.Supply chain management
This is perhaps one of the most important aspects of the e-commerce industry since the current supply chain system has issues only blockchain technology can solve in today’s, fast-moving ecommerce business world.
Blockchain projects like VeChain aim to create an incorruptible visualization of the supply chain process. Since data validated on the blockchain network is virtually incorruptible, the supply chain process on a supply chain focused blockchain network is a much-needed solution for supply chain management problems facing the e-commerce industry today.
An incorruptible blockchain network will provide a transparent supply chain where consumers can see the order flow of the products they buy, helping increase consumer confidence.
3. Data security
One of the problems with existing e-commerce platforms is how data is stored. E-commerce platforms are home to a very large amount of data, most of them collected directly from customers and retailers registered on any given ecommerce platform.
Customer’s data is stored on centralized servers where it is vulnerable to online criminals. Some e-commerce companies have suffered attacks from cybercriminals and a substantial amount of data has been stolen. However, with a blockchain based e-commerce platform, it is virtually impossible to suffer such attacks since blockchain platforms are decentralized, which in turn means customer data is also decentralized.
It is virtually impossible to hack all the nodes of a blockchain platform, so data on a blockchain based e-commerce platform is considered to be relatively safe.
4.Transparent marketplace
This is considered one of the biggest problems faced by existing e-commerce platforms. Many complaints have been reported against giant e-commerce stores by other retailers. With that, the President of the United States, Donald J. Trump, also recently tweeted about Amazon’s transparency concerns since big name e-commerce stores like Amazon are known for cutting off direct contact between consumers and sellers, and sometimes disabling a merchant’s page with little or no explanation.
With blockchain based e-commerce platforms like Bitboost, transparency is the “watchword.” Bitboost is a decentralized marketplace that facilitates online transactions between buyers and sellers in a frictionless and transparent manner.
With these solutions offered by blockchain technology to help solve the inherent problems of the e-commerce industry, industry leaders like Amazon, Alibaba, and EBay have already responded by working on blockchain research and development while others like Walmart and Unilever are working on blockchain projects with large tech company IBM.
E-commerce companies will try to do one thing; utilize blockchain technology to solve the issues their current e-commerce platforms face, and to solve these issues as soon as they can.
Another amazing tool utilized through blockchain technology to help create an amazing user experience is Artificial Intelligence. Artificial Intelligence will help blockchain based e-commerce platform users facilitate system interactions in an even better, more automated way. Reviews and incentive programs will be seemless. Imagine, a blockchain-based e-commerce platform using artificial intelligence?
With e-commerce facilitating B2B and B2C business reaching unprecedented levels amidst the problems faced by the existent e-commerce platforms, a transformed e-commerce industry facilitated by blockchain technology will skyrocket B2B and B2C sales, only this time with happier sellers and buyers. The ecommerce industry will become a more efficient and transparent one as this technology continues to roll out. We can except to see approximately seventy percent of this milestone to be achieved within the next 5 years.