China: Blockchain adoption in Retail 中国：零售业采用区块链
Does blockchain have its place in the huge China retail market? 区块链在庞大的中国零售市场中是否占有一席之地？
China recently reported zero new COVID-19 cases, though that may slightly change as there have been cases brought back by overseas returnees. This marks a potential turning point in the global fight against this pandemic and paves the way to revive an economy crash, after two months of travel restrictions and quarantines across the world.
During the peak of the COVID-19 outbreak in China, cities across the country imposed strict lockdown policies to contain the virus outbreak. The dramatic decrease in foot traffic led to many retail businesses struggling to stay in operation. In China, retail sales declined by 20.5% from January to February 2020. However, traffic in the major shopping districts of several upper-tier cities in China increased by 30% during the weekend of March 14.
As China’s consumers remain wary of potentially sparking another outbreak, businesses are rolling out new promotions and discounts, hoping to incentivize shopping.
For the past decade, China has become the leading innovator in e-commerce and retail spheres. Across China, grocery stores, shopping malls, supermarkets, hypermarkets and convenience stores are getting a digital upgrade designed to usher in the next generation of shopping experience.
For years, the physical sales network and the digital networks were managed separately by companies when it came to a database, customer relationship, loyalty program, transactions and logistics. Therefore, it is challenging for businesses to follow the customers through multiple contact points and devices and provide consumers with seamlessly integrated shopping experience across channels as well as personalized recommendations.
Data is the most important element in redefining retail. With big data, multi-dimensional digital marketing can help increase the return on investment for advertisements as well as the conversion rate of the online and offline merchants. Chinese consumers are becoming more selective in the choice of their products, and are willing to pay more for quality.
Higher product safety and more precise tracking are now part of consumer demand. Thus blockchain can introduce the new concept of product tracking right at stores.
Although the China government is not acceptive with blockchain or cryptocurrency back in 2018, the circumstances are different today. The tides have turned. Facebook’s new proposal for a digital blockchain currency called the Libra project pushed China to accelerated the release date of its own state cryptocurrency.
Blockchain technology allows retailers to trace the origin of products and new inventory management systems and these factors are important to prevent fraud, counterfeit products, and questionable ethical practices. Blockchain develops a physical-digital link between goods and their digital identities on a blockchain, identifying the products through a cryptographic seal or hash that is connected to the individual product. In addition to improving the supply chain and combating counterfeit goods, blockchain technology is also revolutionizing the way consumers shop online or make payment.
World’s biggest supermarket, Walmart launched its first Blockchain Traceability Platform in China, allowing its consumers to acquire more knowledge on products, showing the sources of goods, logistics and testing results, thus empowering suppliers to better safeguard food safety.
By the end of 2020, Walmart China’s new blockchain system will be able to track about half of the total packaged fresh meat, 40% of packaged vegetables and 12.5% of seafood.
By scanning the products, consumers can acquire a large amount of information, which is immutable once the data are written on the blockchain.
China setting the trend
The rest of the world has always been following China for its on-going and amazing innovations in retail and commerce. Blockchain in retail is looking great in the future with China supporting this initiative. It is true that China is aiming for technology supremacy, pumping billions into emerging industries from biotech to AI. Unlike robotics, quantum computing and 5G communications, the consequences of China’s blockchain binge are still unclear. Blockchain technology is still considered to be in its infancy and the use cases are still in the process of being understood.
Retail companies should constantly keep updated with new technologies, new trends, and consumer insights to adapt to these changes and succeed in bringing customers an exceptionally convenient and exciting commerce experience.
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