How the blockchain transforms the online retail industry

Nov 13 · 6 min read
Image source: Statecraft

【Published by:NetAdmin | Editor: Chen Hong-Zhi | Translator: Statecraft 】

Blockchain technology has been applied in various industries. More and more blockchain technology can be integrated into life with existing network technologies, such as e-commerce related to life, and assisting retail through the Internet has become Mainstream.

Between 2008 and 2009, the character of the pseudonym Satoshi Nakamoto published the “Bitcoin: A Peer-to-Peer Electronic Cash System” article in the technical community, and after the concept and algorithm of Bitcoin operation, the “Blockchain” technology in the past ten years. Various applications have emerged in our lives.

However, due to Crypto, mining, Initial Coin Offering (ICO), etc., the blockchain seems to be gradually becoming a negative term, and when discussing practical applications, more questions about the specific available cases except Bitcoin.

Through what is commonly referred to as Distributed Ledger Technology (DLT) technology, the blockchain (under the aforementioned protocol architecture) can transmit, exchange, verify and store relevant information through each node, and provide encryption, difficulty in being tampered with, and information. Open and transparent, and can be queried at any time.

How can the blockchain be used?

In the past, Satoshi Nakamoto, in view of the financial tsunami caused by the collapse of Lehman Brothers Holdings in the United States, caused great influence on countries and the public. It proposed to use the blockchain technology of Distributed ledger as a solution and hoped to change the current centralized financial system with relevant applications. However, because there is no mandatory central organization (also known as Decentralized), it is not easy to be controlled by a specific country, enterprise or organization, and it is difficult to be tampered with, can be inquired at any time, etc., and can also be used in industries other than financial technology, such as in shipping. The field can replace the actual paper bill of lading, can track agricultural products in the agricultural field, and assist in copyright deposit or collective management in the field of intellectual property.

Taking copyright deposit as an example, Article 3, paragraph 3, of the Taiwan Copyright Act provides “Copyright means the moral rights and economic rights subsisting in a completed work”. However, the key to most copyright cases or disputes is how to prove the point in time or the person who completed the work. In practice, it is often the case that the right holder submits the manuscript, file or correspondence. However, the right holder may be unable to prove the rights due to paper loss, file damage or other reasons. At this time, if it is assisted by blockchain technology, if the work is completed, it will be deposited on the chain. Later, when you protect your rights, or when you are in the process of litigation, you will have better and more usable evidence.

In addition, in the maritime sector, the TradeLens system, which is supported by IBM’s blockchain technology and trial operation in Montreal, Canada, has been gradually accepted by shipping companies and related companies since 2018. The system not only replaces the original paper bill of lading and other operations, but also the communication between customs, shipping companies or contractors can effectively simplify the process of application, inspection, taxation and customs clearance through the blockchain, and fully demonstrate the technical assistance and mutual trust. And the effectiveness of digital transformation.

Online retail is a predictable application

In addition to the aforementioned applications, more and more blockchain technologies can be integrated into life in combination with existing network technologies. For example, e-commerce, which is closely related to life, has become the mainstream through the Internet. Take the industry and service census conducted by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan Taiwan in 2016. In the annual service sector, the retail industry sold 33,078 entrepreneurs through the Internet. NT$204,918 million, of which sales to the enterprise (B2B) amounted to NT$5,756 million, while sales to individuals (B2C) amounted to NT$199,162 million, accounting for 97.2% of the retail network sales amount. Show the importance of online retail.

However, because Taiwan’s retail industry is dominated by small and medium-sized enterprises, it has few resources, and its investment in research and development is not high. In addition, many shops and stores have been able to provide mature and affordable products or platforms, such as various stores’ own platforms and apps. The competition environment is fierce, so the network services or solutions selected by the manufacturers are often based on lower costs. However, the choice of cheap or Yangchun e-commerce platform or service may not meet the actual demand or may be derived due to poor function or even Issues such as capital and security.

In the future, if the characteristics of blockchain can be used, such as information can be encrypted, difficult to be tampered with, transparent, open and traceable, online retailers should be able to provide better services, even optimize internal procedures and assist in the connection with external enterprise APIs. It provides a trusted and secure environment. Specifically, due to cost considerations, most small and medium-sized or micro-e-commerce companies do not have self-built warehousing logistics and docking systems with banks. they can use the characteristics of blockchains to plan and establish an intermediary platform on a technical basis. Because of simplified API concatenation, it can provide supply chain information sharing to help manufacturers keep track of logistics progress; cooperate with the maturity of domestic hardware security execution environment, such as SSL certificate, combined with Decentralized Identifiers (DID) verification mechanism, and connect related financial services, and provide an instant check. The transaction amount is exempted from the end of the month, and the number of sales in the current month can be confirmed by the payment order.

Further, manufacturers can use the supporting measures of blockchain technology to balance ease of use and scalability. For example, smart contracts and blockchain wallets can seamlessly integrate with external financial or related services, and integrate internal supply chain information such as system information, Enterprise Resource Planning (ERP), or devices in external IoT devices. Based on the technical characteristics of blockchain, a secure and private transaction or communication protocol is established, and at the same time, through the communication between multiple participants, the real-time and personal data protection of the cross-unit information of logistics and financial flow is solved.

In addition, in the aspect of assisting marketing, before the implementation of the application of blockchain technology in the past, merchants can only passively send marketing information through LBS location service. After combining with blockchain application, they can also use tokens, credits or consumer discounts. Attract consumers, assist with business district integration or take the initiative to attack. More importantly, with the help of blockchain technology, in the management of consumers, customers or member materials, retailers can more effectively grasp their behavior patterns and should be able to do more with less for analysis of customer groups and precise marketing. The blockchain can also assist the communication between the various participants. Regardless of the cooperation between the industry and the industry, in addition to the retail products, the service contents such as the relevant tickets and package itineraries can be matched to effectively assist in the planning and overall marketing strategy. Avoid wasting resources.

Blockchain technology can be applied to e-commerce to enhance the service experience./ photo: NetAdmin

All in all, because Taiwan’s retail industry is mostly small and medium-sized enterprises, it needs efficient and simple solutions. As mentioned above, it can provide simple operation on the platform, effective member management system, easy to connect marketing, gold flow, logistics, and other functions, and Taking into account privacy protection and information security, and effectively using technology to assist manufacturers or co-participants in solving pain points and improving efficiency, this is the essence of applying blockchain technology.

■ Source: NetAdmin

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