In 2021, e-commerce will be a highly profitable industry. Blockchain Ledger technology incorporation can prove fruitful with the Blockchain e-commerce sector poised for expansion. According to a recent market study, the worldwide blockchain market expects to expand from USD 3.0 billion in 2020 to USD 39.7 billion by 2025.
These include online identity verification, supply chain monitoring, transparency, and cybersecurity, all of which blockchain Ledger technology can help address to some level. Big online retailers like Walmart and Amazon are already harnessing Blockchain’s capabilities to make their operations safer, faster, and more scalable.
Comprehending the present state of international financial transactions
Remittances and wire transfers between banks, governments, individuals, and businesses are all included in the broader category of cross-border payments. This reminds us of the high costs of exchange rates and local taxes and the need for advance funding from banks, which might add to the already substantial risk.
Rapid evolution and adjustment to post-COVID shifts in consumer behavior and preference characterize the online retail sector. Simply put, modern consumers demand a convenient and quick purchasing experience and safer and cheaper services. And the tried-and-true methods of international currency exchange have been vulnerable.
The growth rate of international trade is particularly rapid in developing economies in Asia, Africa, and Latin America. Despite this, statistics reveal that approximately 75% of firms still need to be paid in their preferred settlement currency. Failed payments have cost the global economy over $120 billion in fees, labor, and lost business, according to a separate analysis by LexisNexis. Facts like these are too important for internet stores to ignore.
Here are three ways that blockchain technology is influencing the e-commerce sector:
1. A more reliable method of tracking and managing supplies
An online store’s success hinges on its supply chain’s efficiency. Implementing blockchain ecommerce marketplace will likely resolve several issues, such as less corrupt recordkeeping, improved alternatives to the centralized database system, and better product tracking. This is because data confirmed on the blockchain network is almost incorruptible.
Statista found that businesses with strong supply chain management practices experienced above-average revenue growth. A robust blockchain network may boost brand trust and sales by allowing customers to track their orders in real time.
The provenance of commodities in a supply chain can now be verified using blockchain ledger echnology. Scanning the RFID tags and embedded sensors provides access to the product data. From the factory to the store shelf, this innovation can assist in tracing the journey of a product. As a bonus, identifying a product’s origin can assist in unearthing discrepancies in the supply chain at various points.
2. Transparent market
This is a major issue for the current state of online marketplaces. Large online marketplaces have been the target of many complaints from smaller stores. U.S. President Donald J. Trump recently complained about Amazon’s lack of transparency, as major e-commerce platforms like Amazon are notorious for severing ties between buyers and merchants and even removing a merchant’s website without warning.
A big boost is a decentralized marketplace that promotes online transactions between buyers and sellers friction and transparently; it builds on blockchain technology.
Industry leaders like Amazon, Alibaba, and EBay are already responding to the answers presented by blockchain technology by doing blockchain research and development, and others like Walmart and Unilever are working on blockchain initiatives with huge tech company IBM.
The goal of all e-commerce firms will be to use blockchain technology to address the problems with their existing e-commerce systems as soon as possible.
3. Privacy and confidentiality of information
The current state of data storage in e-commerce systems is a major issue. The vast majority of the information on e-commerce platforms has been gathered directly from customers and merchants who have signed up for that particular platform.
Information about customers is held in one central location, making it susceptible to cybercriminals. Cybercriminals have launched assaults on some e-commerce businesses, resulting in the theft of sensitive information from such companies. Since blockchain ecommerce platforms are decentralized, so is consumer data, an e-commerce platform built on the Blockchain is extremely safe from these attacks.
Data on a blockchain-based e-commerce platform considers safe because it is nearly impossible to hack all the platform nodes at once.
Problems that can address by blockchain technology
The term “blockchain” refers to a database that stores data digitally and shares it across all the computers in a network (an immutable ledger for transactions). When applied to international money transfers, it has the potential to resolve virtually all of the issues not plaguing the industry for several reasons.
A blockchain can connect financial institutions across borders and into a single network. Since Blockchain cuts out the middleman, transactions can be settled instantly, cheaply, and at the current currency rate. Compared to the fees banks now impose on customers due to payment processing, this option is both affordable and convenient. Unlike banks, businesses may accommodate customers’ varying schedules and payment needs by accepting payments throughout the clock, regardless of where they locate worldwide.
Blockchain technology has the potential to revolutionize the whole eCommerce business by decentralizing operations and increasing transparency. We still have to wait to see these technologies implemented, but they have the potential to explode B2B and B2C sales in the future by providing greater transparency in the eCommerce business.