Why blockchain is the following huge development for e-commerce

A Gartner forecast says that “the business value-add of the blockchain technology will grow to more than $176 billion by the year 2025, and then it will exceed to $3.1 trillion by the year 2030.” No doubt, more and more businesses are using the power of blockchain to make their online tasks more secure, fast and scalable. And, the eCommerce industry is no different.

According to the estimates of eMarketer, retail e-commerce sales amounted to $2.304 trillion in the year 2017, which is up by approximately 24.8% over the previous year. In addition to this, mobile commerce made up 58.9% of digital sales all across the globe. This indicates that the burgeoning e-commerce industry is ripe for disruption by the way of blockchain adoption.

Now, with the mainstreaming of the blockchain technology, Amazon and a plethora of similar e-commerce brands will go through a major disruption. There are 2 major drivers for this latest transformation:

1. Decentralization which is opposed to monopoly

As we all know that the e-commerce monopoly of a handful of players is almost complete. There are almost no challengers for existing players, and the cost of the change is also too high. Normally, if you observe any industry, every time a nearby monopoly arises, a new technology emerges that disrupts that particular industry. In the year 2007, Nokia was the king of mobile phones. Then came Apple, which was the least expected name as a disruptor. Similarly, when IBM was leading the computer world, Microsoft emerged as the disruptor.

Now the time has come for blockchain to disrupt the entire e-commerce space. Blockchain technology essentially decentralizes control and makes sure that trust is achieved without the need for centralized power. In addition to this, it means greater transparency and power for the end consumer.

2. Regulatory changes

One of the largest regulatory changes came in the form of the European Data Law, which entered into force on May 25 of this year. The data protection law will have a huge impact on blockchain technology and e-commerce players. Whether the General Data Protection Regulation (GDPR) or other regulatory frameworks, monopolies in the world of e-commerce will be subject to different types of attacks. The new regulatory changes will have a crucial impact on the existing players.

Have a look at the ways Blockchain will impact the eCommerce Industry:

1. Payments Methods will get revamped

Blockchain witnessed its first integration in currencies driven by its frameworks and technologies (such as bitcoin, ether, and ripple). Today, cryptocurrencies are being widely used as an alternative to traditional currencies.

This change is due to the relative ease of implementation and the fact that they are decentralized. Bitcoin and various other cryptocurrencies offer various advantages over traditional currencies which benefits both merchants and customers.

Some important advantages are listed below:

Decentralized

Blockchain is not regulated by any central authority, which generally implies that the seller and buyer only control blockchain operations. Hence, no third party can manipulate or review their transactions.

No bank or government can devalue or inflate blockchain currencies, as is the case with other currencies. For instance, if the economies of any country collapse today, their money or currencies would suffer terribly, which is not the case with bitcoin as geopolitics or geographies do not influence its operation.

Identity protection

Cryptocurrencies based on the blockchain technology do not reveal the identities of the parties that carry out the transactions. Even so, these transactions are transparent since the centralized ledger stores the details and give visibility to the transactions.

Freedom of transactions

There is no any particular governing body that controls how any person uses their bitcoin. Most of the time, regular payment methods are imposed with various limits on the basis of quantity and even geographic location. However, this is not the case with currencies like Bitcoin which is a Blockchain-based currency that gives users absolute freedom to transact without any limit on the spending limit.

Easy to use

Blockchain-based coins are easy to use. Unlike traditional currencies, it is not required to visit any regulatory authority to create an account for using that. All this can be achieved easily in the comfort of your home. In addition to this, they do not impose any fees to open an account; Instead of this, a virtual currency wallet is absolutely free.

Faster Transactions

Traditional transfers generally take a long time, especially sending money across different countries can take several hours to complete. On the other hand, Bitcoin transfers only take a few minutes! The most crucial thing is that they are not closed at any time, and a transaction could take place at any time, in an instant.

Reduce fraud

Blockchain-based currencies are extremely safe for transactions purposes. Owing to point-to-point technology, it is very difficult to hack this process and perform fraud. Hence, it is one of the safest transaction modes available at present.

With the recent developments, it is very likely that e-commerce markets will soon allow their clients to pay with Bitcoin instead of PayPal or Stripe. In addition to being decentralized, easy implication and security, send and receive money will be as convenient as scanning a QR code.

It is most likely that the relative ease of making and getting payments is the first blockchain implementation in the e-commerce market.

2. Improved Supply Chain Management

Supply chain management is perhaps one of the most pressing concerns of all e-commerce companies. Given that the supply chain is an essential element of any e-commerce activity, the implementation of blockchain in this sector will likely solve many crucial problems.

The blockchain can be used extensively in order to solve supply chain issues such as record-keeping and tracking products as a less corrupt and better alternative to the centralized database.

Other uses of a supply chain include:

In the blockchain-based supply chain management, provenance and record-keeping tracking become easy, with product information accessed using built-in sensors and RFID tags. The timeline of a product from its creation to its current location can easily be traced through a chain of blocks. In addition to this, the type of accurate provenance tracking can be used to detect anomalies in different segments of the supply chain.

Cost reduction

When the blockchain is applied to enhance the administrative processes of the supply chain, the additional costs incurred by the system are reduced automatically while ensuring the security of transactions. In addition to this, eliminating intermediaries eradicates the risk of fraud and product duplication while saving money. Suppliers and customers can further process payments within the supply chain by using cryptocurrencies rather than customers and suppliers or by using EDI.

Inventory Management

The blockchain can also be used widely in the back end of the supply chain. For instance, inventory management becomes much easier by introducing a chain of blocks into the process. Implementations of the blockchain effective inventory management allow retailers to avoid various unnecessary expenses of repeatedly hiring new employees.

3. A More Transparent eCommerce Marketplace

With the recent negative reactions that many large retailers have faced as a result of accusations of lack of transparency, this is one of the serious problems facing existing e-commerce platforms. For instance, Amazon was in the news for deactivating a merchant’s page without any explanation.

Thus, applying the blockchain technology to the e-commerce market would create a decentralized environment in which any wrongdoing by business or merchant can be monitored effectively.

A transparent e-commerce market also makes it easy to conduct various transactions efficiently and without any friction.

In addition to this, with the announcement of recent blockchain projects by retail giants such as Unilever and Walmart, it is clear that they aspire to gain a foothold in blockchain offerings.

4. Secure

Today, the blockchain can easily be considered as one of the most secure platforms in the market. DLT or Ledger Distributed technology, of which Blockchain is one of the vectors, provides advance security for online database platforms, making it an ideal choice for e-commerce implementation. In addition to this, the number of security breaches in blockchain-powered networks has been almost negligible.

Another crucial blockchain offer for eCommerce companies is that currencies based on blockchain do not present personally identifiable information.

Cryptocurrencies such as Bitcoin work like cash in the sense that they do not need a consumer in order to expose sensitive data. In fact, the customer himself authorizes the transfer of his personal “wallet” to that of the recipient. The only separate data related to each wallet of the user is a randomly generated unique identifier.

As data theft and cyber-attacks have increased tenfold, there is an unavoidable risk of losing customer data. The adoption of the blockchain is, hence, an absolute key to solving these problems.

5. Spawning Genuine Reviews and Personal Offers

Fake Reviews

Reviews- either good or bad — can determine the order in which an enterprise appears in an e-commerce market or in a search result. False reviews tarnish the reputation of a good firm while promoting a fraudulent business. The reputation of any online business rests on the legitimacy of its critics. As a result, most of the online operators are increasingly concerned about product reviews on the Internet. Therefore, make blockchain technology a crucial source of verification of opinions on their services and products.

Blockchain deployment can help curb false comments because blockchain stores data in blocks that are then added to a chain of similar information blocks. Each block must be verified on a network of computers before it can be added to the chain. After verification, it can not be changed. The technology can also be used to create a digital map of someone, a map that can not be changed.

Personal Offers

The adoption of the blockchain technology in business processes can be extremely beneficial for the marketing purpose because you can assign redeemable reward points to customers using blockchain when they pass a specific expense bar. It allows the customer to benefit from a wide array of discounts and customized offers while allowing a proper tracking of dataset technology, which will make blockchain technology even more efficient.

6. Save Time & Costs for Both Consumers & Retailers

Taking a share of the total payment in various e-commerce transactions is a crucial way in which traders realize their own profits. Unfortunately, the more players on the payment network, the higher the cost to the clients. The lack of direct contact between the seller and the buyer complicates customer awareness as well as forces them to pay more for more entities.

Customers are clearly looking for a reduction in the total cost of online transactions. One study found that 9 out of 10 customers said that free delivery — at Amazon’s premium — as their main incentive to do more online shopping. However, retailers — who have not all benefited from the boom in e-commerce — could also reap benefits from the adoption of blockchain. As it stands now, an average of 6 out of 10 retailers has been affected by a common aspect of online commerce: the growing number of people returning their items after purchase. 22% of physical stores choose not to sell by online means because of huge delivery and return costs, while many increased their prices to cover these additional costs.

The blockchain, with its independence from a network of intermediaries and its automated character, will eventually reduce the overall costs for both retailers and consumers by reducing the number of fees to be paid to additional third parties. While this may not solve the problem of high return costs completely, fewer intermediaries and associated costs may be enough to make more retailers competitive in this online market.

Let’s Wrap Up:

Now it is evident that Blockchain plays a crucial role in the eCommerce industry that’s why more and more businesses are going the blockchain way to make their eCommerce more secure, easy to use and fast. There are many eCommerce companies in Dubai that are providing online store development services using the features of Blockchain. You can hire eCommerce developers from these companies to enhance the features of your online stores.