The APEX Story: Understanding the B2C industry, its perils, and its solutions

14 min readJul 10, 2018

About APEX

APEX is the child of parent company Chinapex which seeks to use blockchain technology to build stronger one-to-one relationships between enterprises and consumers — transforming how interactions, information, and value is exchanged in the B2C engagement process. APEX Network will help facilitate increased trust, privacy, and transparency for B2C interactions. It will also optimize efficiency, cost-effectiveness and help eliminate middlemen networks when necessary.

A brief introduction to B2C

Business to consumer (B2C) refers to the transactions conducted directly between a company and consumers who are the end-users of its products or services. A good example would be Amazon; Amazon is a business which sells products to its users.

Problems in the current B2C space

The core problem in the B2C space revolves around the data and its interaction between the businesses and the consumers. The way data is acquired, kept and utilized are the key hindrances preventing the delivery of value to both the businesses and consumers. This data-ecosystem is broken on both ends- Businesses and Consumers.

Let’s try to understand the root causes of this Data Problem in depth below…

1. Inadequate compensation to user for the value of its data

With the advent of distributed computing and big data, centralized data aggregation model has created a number of efficiencies and breakthroughs for consumer data analytics and digital marketing. Some of the most prominent examples that are reaping the benefits of data analytics are Facebook, Apple, Amazon, Netflix, Google (FAANG), Baidu, Alibaba, Tencent (BAT) stocks. These stocks make billions of dollars every year in profits and user’s data plays a very important role in it. The problem here is…does the company compensates the users fairly for the value their data provided them with? The answer usually is no; what little value is provided is often incommensurate with value provided by a user’s data.

Data is extremely valuable and companies treasure it. APEX believes a decentralized protocol that promotes fair data ownership model between platforms, consumers, and enterprises is more ideal and a healthy way of going forward as an ecosystem. The data, YOUR DATA, that you share with companies will be upon the terms and conditions that you approve.

2. Data Security and Privacy

Data security and Security of Privacy remain one of the most challenging issues in the consumer data space, particularly because of this history of catastrophic incidents surrounding consumer data breach or privacy violations of data stored with internet and consumer data companies. Some incidents are examples of the security flaws of centralized data storage, such as the 2017 Equifax data breach incident, which leaked close to 150 million sensitive identity data, and multiple Yahoo data compromises starting 2013. The Cambridge Analytica scandal that rocked 2018 was a major Facebook’s user data privacy violation. It was a complete betrayal of user’s trust.

No individual would feel comfortable sharing data with any enterprise they don’t trust can safeguard their data. Specially, with the advent of new data streams of heavy value- IoT, the whole challenge of safeguarding data and privacy only grows stronger by every passing day. Read this article which discusses the challenges of IoT security

APEX’s decentralized cloud data deployment (which is encrypted with SHA-256) provides much needed security to data and privacy. Its blockchain tech based smart contracts prevent unconsented exploitation of data.

3. Legal Compliance and Consumer Consent

Legal Compliance and Consumer Consent is becoming significant factor that is shaping how the consumer data landscape is moving forward. Recent European data regulation, GDPR (General Data Protection Regulation) which tightens data protection rules for all companies in Europe and outside of Europe for any data collected relating to and of EU residents. Similar data regulation laws have been passed in Japan, China during 2017. It makes sense for a company to become legally compliant unless they wish to witness the wrath of the government on their operations. APEX has vowed to be compliant with data regulations.

Consumer consent has often been overlooked by enterprises or the consents have been taken in an implicit manner by shady means from the businesses. Decentralized technology can play a significant role of how consent and layered permissioning protocols can become more fair, transparent, and automated.

4. Data Transparency, Accuracy, and Quality

As previously stated, the system is broken on both sides. Data Transparency, Accuracy, and Quality are the problems faced by the enterprise side. There are two ways a company can get data of high quality,

(a) Themselves: They contact consumers directly to get data i.e. a direct interaction. In this method the entire process maintains highest standard as per as practices of the enterprise. They get the necessary parameters they want from consumers as per as their requirements. Since it is intrinsic it operations are completely transparent to the company

(b) From Third Party: The enterprises can get data from third party data providers. But the problem is, is the quality of data as per as their standards? Is it accurate? The enterprises cannot verify it because the business practices of third parties for the most remain confidential i.e. non-transparent. This creates a helpless atmosphere for enterprises. More often than not the quality of data provided to them is sub-standard.

The B2C Interaction Problem

Besides the data problem, there is one more problem which is hindering the development of B2C interaction. The present means of engagement between customers and businesses are very inefficient. There is a strong need to improve the existing mechanisms in B2C customer lifecycle.

Let’s try to understand the B2C interaction problems with an eye on B2C customer lifecycle.

1.Wasting of Capital by Middlemen Networks

While Direct engagement of an enterprise is efficient depending upon the standards of the company. It’s not the same when it comes middlemen networks. (“middlemen networks” in present context refers to any channel or layer that facilitates communication, interaction, or exposure between enterprises and consumers. e.g. ad networks, affiliate networks, advertising platforms, push notification channels, third party applications.)

Let the numbers do the talking

56% advertising are not seen (noted viewed) [Google/Double Click Study]
$6.3 Billion of digital ads will be wasted on fraudulent activity or bots [ADWEEK]
23% of premium video ads is fraudulent bot activity [IAB]
58% of consumers do not trust online banner advertising. [Nielsen]
52% of consumers find push notifications annoying [Localytics]

2. Ineffective Loyalty and CRM Programs

Brands and enterprises from various B2C sectors including travel, retail, and financial services have attempted to create their own loyalty programs which is typically a point system of different tiers so as to redeem their rewards. This has proved to ineffective in practice. More often than not majority of these “points” waste away as the terms of redemption are not favorable to the consumers side. There is a need of cross brand points redemption system. APEX is in a position to provide this solution. It’s DEX would allow users to exchange points/assets (tokens) between various brands with CPX as the mediator of exchange.

Coming to CRM for promotions, the present practices generally are to deploy offers via notifications and messages. But again, it is one sided, generally tilted towards company’s side. The user gets little or no value from these offers. APEX can provide a breakthrough in optimizing CRM operations via its data driven insights platform NEXUS. The value provided by these data-driven insights can tremendously boost business.

To summarize, traditional methods i.e. centralized models, the problems continue to exist in data ownership, storage, and exchange. These problems further engender issues surrounding trust, privacy, security, rights, quality, hindering the development of next generation of data-driven B2C interactions.

Why Blockchain is the solution to present B2C Woes…

Based on APEX’s study following are the measures that need to be taken to optimize B2C interactions

Seeing the recommendations, it becomes apparent that Blockchain is indeed the most optimum solution for B2C bottlenecks. Privacy, Trust, Transparency, Security and Decentralization are fundamental characteristics of a Blockchain.

Innovative Technological Offerings by Apex

1. Sidechains

Any business or a brand that wants engage with customers has to develop it own dApp. Apex empowers the brands to have higher scalability by offering sidechains. A sidechain can be used to deploy a dApp or multiple dApps on it. These sidechains stem out from the main network of APEX and operate with PoS consensus. Each brand who wants to deploy a sidechain will have to be qualify supernode requirements which includes holding a certain number of CPX tokens.

2. Consensus

The main network of APEX uses DPoS (e.g EOS) and any sidechains operating in the ecosystmem uses PoS (e.g ETH). It is my view that, a blockchain ecosystem in real world would work with a combination of centralization and decentralization. Since APEX targets B2C space, a decentralization to the likes of Bitcoin or Ethereum is not an ideal solution. It makes sense for the sidechains (& other nodes) to choose a representative(delegates) to represent their best interests i.e. DPoS (just like how EOS chooses its block producers) at the heart of network, while each sidechain governs itself internally via PoS (since businesses will have the biggest stake in it, PoS becomes the most optimal choice).

3. The Cross-Network DEX

It is perhaps one of the most disrupting offerings by APEX. The major problem why loyalty programs are failing these days is due to low value provided to them by the brands to retain their loyalty. The points expire after a certain period of time without having being used by the customer. But APEX is here to change it. Let me illustrate it by an example, imagine if you have Starbuck’s coin in your wallet and Whopper Coin (Burger King) in your other wallet…What if you could exchange them between themselves (or other such branded tokens)? Well APEX networks gives that power to you via its DEX (Decentralize Exchange)

An example of DEX in action enabling cross-brand asset exchanges

Doesn’t it bring more value to you? It increases your chances of preserving the value by giving you the power to transform tokens from one brand to another at your will. This DEX will use CPX as the gas to power the exchange.

4. NEXUS

This a proprietary tech that is being offered by APEX. NEXUS is a new breed of customer data technology that starts from data collection and processing of large datasets, to running advanced analytics and turning insight into marketing activation. The value provided by these insights are often responsible for increased efficiency or boosting the profits in modern day companies.

Take a look at live demo of NEXUS in the link below (It is Amazing!)

https://vimeo.com/247269223

Partnerships

Amazing partners…aren’t they? Its not everyday you see partners like this in crypto space. AWS, Oracle, Azure, Tencent are the giants the cloud computing industry, having partnerships with APEX further strengthens the brand name of APEX.

Coming to Microsoft Accelerator, I often find people overlook the value of it or are simply oblivious about what Microsoft brings to the table. Being part of Microsoft accelerator is a highly competitive process, APEX was one of the 15 companies out of 1000 companies to be selected in it in 2017. Microsoft Accelerator provides capital resources, business/tech advisory, and technology partnerships.

Take the words from the CEO himself…

This the kind of partnership that I like the most…i.e. the partnership which helps in creating more partnerships.

Aside, from this APEX is partnered with China Government-Backed Data Consortium, Shanghai Data Exchange. This partnership in my opinion is huge. Being partnered with a government entity provides perhaps one biggest certificate of legitimacy and acknowledgement. (Its thorough discussion goes beyond the scope of this article, so I’d advise you to take a full read over here)

Clientele

APEX’s parent company Chinapex has over 350+ companies in the clientele (which includes numerous multi-billion dollar companies)

It’s not wrong to expect that some of these partners would start forming serious partnerships with APEX. A recent partnership between APEX and Maserati is a testament to this idea.

According to the CEO Jimmy Hu, over 70 enterprises out of the currently 350+ existing customers showed interest to run pilot programs on the APEX testnet. However, due to limited resources (pilots demand a lot of resources) only 20 of them could be actually accepted.

Since APEX Network will be implemented into the NEXUS module (which is used by all the enterprise customers of Chinapex / APEX Technologies), it does make it really easy for them to adopt it for them in the long run.

Why more Businesses will partner with APEX in future…

Businesses know they need to have an edge over their competitors, the most common way to do so is by investing in R&D in context of newer technologies. The companies who embrace newer technologies are prone to edge out their competitors. At this point of time Blockchain and AI are the most prominent of these disruptive technologies, both of which are being handled by APEX. If they businesses want to stay ahead in the race, it makes sense for them to partner with likes of APEX.

To put things into perspective, below are the findings of research by some of the most reputed firms in context of B2C industry which is ripe for disruption

Research findings depicting various sectors of B2C ripe for disruption

Drivers of Token’s (CPX) Monetary Value

1. Coins Locked in Nodes: By 2020, I expect 400–500 companies using APEX’s solutions. In order for them to create sidechains, each of them would need to buy a Supernode. In order to get a supernode an enterprise would need buy and lock 2mn CPX. In case of a big enterprise which would like to deploy 4–5 sidechains to ensure a smooth flow of transactions on their network, they will again need to buy 2mn CPX per sidechain i.e a big brand can easily lock 10 million of CPX. Assuming even 100 of these companies decide to deploy couple of sidechains (a conservative estimate) …near about 200mn of CPX will be locked. Furthermore, I have seen many community members holding a T2 (Tier 2) voter node (over 70k CPX). Assuming, there will be atleast couple thousand holders of T2 node, about 140mn in CPX will be locked in T2 nodes. Cumulatively, about 340mn CPX will be locked in conservative estimates (about 1/2 of the total supply).

As the number of CPX coins in circulation decreases, the token value should appreciate due to increased demand in the market.

2. DEX operations: APEX has plans to launch its DEX by Q4 2019. The DEX will charge a fee for trading the branded tokens (or any other crypto currency it decides to list by then). CPX will be used as GAS to power the exchange. Looking at coin statistics, exchange tokens in general have been giving better ROI than the other category of coins. In case CPX employs some strategies like BNB does e.g. discounting trading fee; it should further propel the monetary value of CPX.

3. Upcoming Exchange Listings: Presently APEX isn’t listed on any mainstream exchange. Current exchanges include Swithceo, LBank, Bit-Z. None with scale of volume big five exchanges have. The CEO at many instances has made it known that he listens to the feedback of the community. He swings around in telegram time to time and interacts with the members. It doesn’t make sense that he is turning deaf ear to community request of getting listed on a decent exchange. He is pursuing a growth strategy that he believes will be the best for the community in the long term. As Rosalynn Carter once rightly said…

“A leader takes people where they want to go. A great leader takes people where they don’t necessarily want to go, but ought to be.”

So big exchanges will definitely come, it just a matter of time, believe in your leader.

Why the Team has what it takes to deliver…

The team is being led by industry professionals who have relevant experience the field of Big Data, AI and have had worked at reputed firms like Microsoft, Alibaba.(Please take a moment to understand that there is a difference between experience and relevant experience. Being experienced is one thing but having relevant experience is a completely different thing.)

The leaders in core management are thoroughly skilled in AI and Analytics. CEO Jimmy Hu has numerous achievement under his belt which includes China Internet Weekly “Person of the Year” for Artificial Intelligence, Forbes China 30 Under 30. COO Tiger Yang has been awarded with China Internet Weekly “Innovative Leader of the Year Award”, and “Person of the Year 2016” Yang also managed various analytics project for Microsoft, Hilton, Maserati etc. Rober Xu, VP of Product was awarded with Ailbaba “Product Expert of the Year”. (Alibaba BTW is the biggest B2B marketplace portal in the world)

All these awards and achievements should speak volumes about the quality of management at top level.

The technology and operations team comprise of talents coming from the likes of Microsoft, Alibaba, Baidu, IBM etc.

Having a talented team from top to bottom should make you realize that team indeed is very much capable of delivering on its promises.

Advisors

Advisory team consists of advisors from some of the most reputed funds in crypto space like Ledger Capital, 1kx, Badwater capital and certain technocrats from the on the ground behemoth tech-companies.

A combination of tech advisors and marketing advisors from crypto space provides Apex with the right counsel to achieve its goals.

Community

It is my view that for any crypto project to succeed, it should have backing of a strong community, and in my opinion, APEX’s community has been one of the most professional community in the crypto space. It has witnessed a steady organic growth. Presently, there are over 30k+ members on the telegram. The moderators in general have been very tolerant towards criticism brought forward by community members (unlike other communities where you are outright banned). The community members too have displayed professionalism and have done their due diligence on APEX has whole. Sure, bear market didn’t make things easier for them, but they persevered and most of them now have emerged out as hardcore hodlers.

A strong community is imperative for a crypto project to thrive well in future, and APEX is doing very well in this regard.

Final Verdict

The team is being led by the technocrat CEO, Jimmy Hu. The company is partnered with Cloud Giants(AWS, Alibaba Cloud, Azure, Oracle Cloud), and is being accelerated by Microsoft Accelerator. Its parent company has over 350 businesses in its clientele. The company’s employees comprise of talents coming from ex-Microsoft, ex-Alibaba, ex-IBM, ex-Baidu employees having relevant experiences in field of AI and Big Data. Taking all these points into consideration, I have come to the conclusion that APEX indeed has all the right ingredients to emerge out as a boon for existing woes in the B2C industry.

Important Links and References