e-Commerce is an economic activity characterized by buying and selling products or services on the internet. The process is inherently electronic in nature and involves active use of internet connection to take place. In this day and time, it is impossible to talk about the economy without taking into consideration the influence of e-commerce. In fact, e-commerce has become so much dominated that the growth of a number of industries depends directly upon the commercial activities taking place over the internet.
Right from the consumer electronics to FMCG products and hospitality industry to the entertainment segment, each and every category is feeling the influence of e-commerce. So much so that even automobile companies today have started selling their products on the internet, which is quite a dramatic evolution of the e-commerce industry. No wonders, e-commerce can be easily classified as one of the most lucrative business of the 21st century, which is going to power growth engines of the economies across the globe.
Blockchain Integration with e-commerce
As the e-commerce industry prepares for the next wave of growth, it can be immensely benefited from the integration of blockchain technology. The open ledger has already become dominant in the financial technology domain and a number of its use cases outside the financial industry are also rising exponentially. The growth of the blockchain sector can be estimated from the prediction that by 2021, the segment is going to grow with an absolutely stupendous growth rate of more than 400%. Among the key sectors where the adoption of the blockchain technology has seen massive growth, e-commerce figures on the top of the list. Following are the areas where blockchain is helping the e-commerce industry to achieve higher growth and business potential in the future:
1) Changing Payment Scenario: The most famous application of the blockchain is a cryptocurrency. We all are aware of cryptocurrencies such as Bitcoin, Ethereum, XRP, Litecoin, etc. Cryptocurrencies have literally changed the face of the global financial sector and thanks to their decentralized characteristic, these digital coins have been able to take away the intermediaries. This not only has made transactions more affordable but also resulted in enhanced protection for customers. These benefits have special significance for e-commerce as it is resulting in cost-saving and better customer experience for the companies.
2) Supply Chain and Distribution: One of the most pressing problems in the e-commerce sector is related to its supply chain and distribution network. Blockchain Technology can be of immense help here as the open ledger provides a far better alternative than the centrally managed database system used for tracking and keeping the records. Using the blockchain, one can track the origin of the product and its journey from the field to the customer and the most important part is that the whole information on the blockchain is immutable. Nobody can make any changes without the consent of all the nodes in the network, and that provides authenticity to the whole information. This also gives assurance to the customers that the origin of the product and other mentioned characteristics conforms to the standards. The benefits of better tracking and inventory management, on the other hand, can be realized in the form of reduced cost and higher profits for the organization.
3) Transparency and Fairness: The application of blockchain technology in the e-commerce sector can also solve the problem of transparency. The issue of fair and just market practices is gaining traction among the number of stakeholders, including government and regulatory agencies. The application of blockchain in e-commerce ensures that fairness and transparency in the system will continue to remain intact as the probability of committing fraud or forgery will be down to nil. Many big organizations such as Unilever and Walmart are working hard on the implementation of blockchain projects in order to drive home the point that despite their bigger size, they are quite open, transparent, and authentic in their business practices.
4) Authentic Reviews and Feedback: Review about the product and services have a considerable influence on the popularity of online products. Many times, competitors start posting fake reviews about rival products in order to win over the competition. This can have a detrimental impact on the reputation and sales of the company. Blockchain can help in curbing this menace by ensuring only authentic reviews are published online.
The application of blockchain in the e-commerce sector has just begun. The implementation scope is enormous and given the number of benefits associated with the application of blockchain, it is just a matter of time before we start witnessing every major player in the e-commerce industry start adopting and implementing the open ledger for gaining cost efficiencies and achieving more customer satisfaction.