The Future of Marketplaces is Distributed
Consider the marketplaces of the past and present, which have evolved with Web 3.0 and the advent of cloud technology, bringing traditional physical marketplaces online, and now to click-and-mortar integration between offline and online stores.
Online marketplaces, an augment of the wider eCommerce industry have come a long way since the launch of the world’s first e-commerce company: The Boston Computer Exchange, based on the bulletin board system initiated in 1982 in the U.S., where users could trade used computers through the online exchange.
The launch of prominent online marketplace giants in the early 90s such as Amazon, Ebay and Alibaba have further reinvented the way people buy, sell goods and services online. The growth of online marketplaces have since proliferated, being a significant driver of global eCommerce growth, with such marketplaces accounting for 50% of global online retail sales in 2017 and forecasted to grow to about two-thirds by 2022.
What will the future entail for online marketplaces builders and the wider eCommerce industry? ArcadierX explores some trends and the future for online marketplaces.
3 key trends for online marketplaces
New growth driven by other emerging technology
Online marketplaces of today are differentiated from marketplaces from the 90s that often have high transaction costs and limited functionalities, providing a channel where buyers and sellers can rely on for a wide variety of tasks every day. As consumers’ demand and growth increase, online marketplaces have gotten more sophisticated, proliferated by other emerging technology such as artificial intelligence (AI), machine learning, augmented reality (AR) and the internet of things (IoT).
The rise of SaaS, the software-as-a-service model has also made building online marketplaces easier and more cost efficient, breaking down barriers to entry and enabling anyone to easily build an online marketplace. Arcadier (ArcadierX’s parent company), is one such example, utilising SaaS and cloud technology to empower users by enabling anyone to set up a customised and full-feature online marketplace from just $0–499/month.
Growing number of niche marketplaces
eCommerce growth has also been driven by a growing number of specialised vertical marketplaces, catering to more niche and local target groups. This enable players to customise and hence better serve customers both locally and globally, based on their specific needs and wants.
Take for example, GoJek, a transport provider similar to Uber, targeted initially for the Indonesia market, and Arcadier’s recent partnership with the United Nations (UN), to build a Defeat-NCD (Non-Communicable Disease) Marketplace, enabling the cost-effective and efficient provision of essential NCD supplies to national NCD programmes in low-resource countries.
Rise of the reputation economy
Web 3.0 has brought about the growth and evolution of eCommerce activities, with consumers becoming more discerning about their online transactions. Feedbacks and ratings on the merchants are now one of the key factors in determining whether consumers will purchase from the merchant — think star ratings on Amazon, feedback rating from Taobao and PowerSellers from eBay.
With that, more and more merchants are gaming the system,fake reviews are increasingly common and consumers have easy way to determine whether the reviews or ratings are real. The manipulation of reviews on Amazon being one prominent example. In addition, sellers face issues such as the inability to cross-transfer their ratings and reputation across marketplaces, thereby increasing the costs of scalability for their business.
Such trends highlight the growing future potential of online marketplaces. However, it also brings to mind some barriers to growth with the issue of ensuring trust, transparency and scalability in marketplaces.
Why the future of marketplaces is distributed
Blockchain technology, with its characteristics of immutability, transparency and decentralisation could just be the catalyst to drive eCommerce and online marketplaces to the next level.
As a peer-to-peer network, blockchain technology brings about traceability and transparency in transactions. With its smart contract feature, it can also act as automated escrow accounts automatically releasing payment once the system detects that conditions of the transaction are fulfilled, thereby removing the need of a middleman and reducing fraud cases.
Where ArcadierX comes in
ArcadierX is Arcadier’s solution to the current issues faced by online marketplaces.
The two primary blockchain-based cornerstones of ArcadierX are the Arcadier Hub and Arcadier Trust, which aim to solve issues related to trust, traceability and transparency in online marketplaces.
Arcadier Hub, which is currently in development this quarter, is a decentralised network of global inventories, enabling faster inventory discovery and providing an access to a distributed inventory pool. Arcadier Trust is an innovative online reputation trust consolidation and portability system, aiming to establish buyer-seller trust efficiently with the use of blockchain technology.
Through the utilisation of blockchain technology together with other technology such as artificial intelligence (AI) and machine learning, ArcadierX aims to strengthen the eCommerce ecosystem by enabling faster discovery and improving distribution in a trustless ecosystem.
Check out ArcadierX’s offical website and learn more about ArcadierX’s journey to disrupt the online marketplace ecosystem with blockchain technology.
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ArcadierX is a project designed and developed by world leading marketplace SaaS (Software-as-a-Service) provider, Arcadier to deploy and integrate blockchain and advanced technological enhancements onto Arcadier’s existing marketplace platform in a phased approach.
These new capabilities aim to develop Arcadier into a fully integrated intelligent eCommerce ecosystem comprising of core blockchain characteristics focusing on aspects such as inventory distribution (Arcadier Hub), reputation trust (Arcadier Trust), payments traceability (ARCTX), provenance assurance, trade financing and data analytics.