How Blockchain Technology Can Change the Face of the E-commerce Industry

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The E-commerce industry has been on the front-foot for decades now. The adoption of ever-changing technology has created a huge impact on the business used to function before. Over the last few years, the e-commerce industry has been growing rapidly.

The report of Statista states that in 2019 the e-commerce industry accounted for 14.1% of global retail sales, and the figure is expected to reach 22% by 2023.

The method and process of online selling have been deeply influenced by technological improvements. And when we talk about technology, it means this new digital era, and we talk about Blockchain. Blockchain technology has opened a new door of opportunities for the industry with its potential. As per the recent report, the market all over the world is expected to have a surge of more than 400% due to blockchain technology by 2021.

From eliminating some business processes to streamlining operations and reducing complexities at every phase. Hence, blockchain has many things to offer to the e-commerce sector to resolve their everyday challenges. Blockchain is the most adaptable technology that every industry including mobile app development company strives for its development.

Moreover, blockchain has given birth to the cryptocurrency payments, which makes it more important for online businesses. So, it would be right to say that blockchain is poised to change the way transactions are made. With the adoption of cryptocurrency, both startups and large enterprises are ready for radical changes.

It’s expected that, soon, blockchain technology will be beneficial to resolve all the issues the e-commerce industry has been facing and create a potential impact on it.

In this article, we are going to discuss how blockchain can change the face of the e-commerce industry in the near future. But before we proceed further, we will enlighten you about blockchain technology. The explanation will help you to understand and invest in E-commerce development services in an effective way.

What’s E-commerce Blockchain?

As we know, now everyone in the world has shifted the way of their shopping. They have been trying their hands-on online shopping. Thus, the e-commerce platform has a large pool of customers, inventory, and transaction data. This large data requires a proper place to store and manage, for effective results.

Here, blockchain technology will help you out in this situation by combining transactions in the form of blocks and connecting every block in the form of a chain. This every block is saved on a separate device thus making it more secure, reliable, and scalable. If you own an e-commerce store and that is developed on Magento 2 platform, you can implement blockchain technology for quality results.

Types of Blockchains for E-commerce

In short, blockchains are nothing more than a special database, coupled with very sophisticated software that connects them to the outside world.

However, all blockchains are not created for the same purpose. Blockchain technology has the capability to handle the whole user experience, including searches and selection of products, payment processing, and post-transaction customer services.

There are four types of blockchains used for the e-commerce platform.

  1. i) Bitcoin

Bitcoin is the first cryptocurrency and the main reason blockchain technology was invented. Bitcoin is now accepted by many large companies such as Microsoft, Tesla, and Shopify.com. The major companies have started accepting Bitcoin as their payment options as well. Hence, adding a Bitcoin as your payment option is encouraging you to use blockchain technology.

  1. ii) Ethereum

Like Bitcoin, Ehtereum is a cryptocurrency framework and a viable platform for e-commerce platforms. Though, it has some pros and cons that make it different from its older rival while implementing it into your business.

When it comes to Ethereum, it is not as widely accepted as Bitcoins, but its network is able to host other forms of cryptocurrencies. It’s also the most common and popular platform which is used for hosting smart contracts.

Ethereum is a practical platform for e-commerce businesses that need a location to operate their own full-fledged blockchains.

iii) IBM

Actually, IBM doesn’t own or offer cryptocurrency. But it offers users a robust platform that is suitable for larger e-commerce blockchains.

  1. iv) Custom

Blockchain provides a custom-built solution for e-commerce vendors and the custom software development company. This is one of the most convenient and flexible solutions as it allows users to build exactly as per their business requirements. It can be a cost-effective solution than other SaaS platforms.

Advantages of Blockchain in E-commerce

E-commerce owners always carry the burden and tension of cyber threats, data breaches, competition, changing user expectations and many other daily things. But with blockchain, there are many issues and challenges that can be solved for e-commerce sellers.

Let’s look at the advantages of blockchain in the e-commerce industry.

Data Security

With existing e-commerce platforms, the major problem is how data is stored. Having said earlier, e-commerce platforms have a pool of a large amount of data, most of them collected directly from customers and retailers registered on any given e-commerce platform.

On any e-commerce platform, the customer data is stored on centralized servers where it’s vulnerable to online criminals. Moreover, many e-commerce stores have faced several online attacks from cybercriminals and several amounts of data have been stone.

However, with a blockchain-enabled e-commerce platform, it’s not possible to face such attacks by hackers since blockchain is a decentralized platform. This means the customer stored data is also in a decentralized form.

For any hacker, it’s virtually not possible to hack all the nodes of a blockchain platform. So, data stored on a blockchain-based e-commerce platform is considered as safe.

Payments

As we know, most of the organizations are accepting online payment methods. But how do you know they are secure? There are several payment methods and tools available in the market now. There are PayPal and other apps, which are commonly used by online retailers.

But what happens here is that these payment methods require a high processing fee. These fees are often charged by e-commerce platforms which start from around 2-3% of the total purchase price of any transaction. Moreover, the retailers charge high commissions on sales. That means clients often end up paying more than expected to online retailers.

However, with the help of blockchain-based e-commerce projects such as ECoinmerce and Request Network, online payments have become more comfortable and fast. High transaction fees are not required for the clients.

Cost-Effectiveness

Bitcoin is a popular and reliable use case for this technology. E-commerce merchants can rely on bitcoin and a host of other cryptocurrencies to avail of cost-effective digital payment solutions. In this whole process, there are no payment processes that have been involved, thus, the transaction can be hassle-free and accepted by sellers at zero processing fees.

Apart from that, blockchain is a decentralized platform, thus, it helps you cut down your cost automatically. This translates into better rates for online merchants while the prices are lower for the customers as the savings are passed on them. Overall, the technology turns out to be cost-effective for both sellers and customers.

Supply Chain Management

Blockchain technology doesn’t only provide more efficient, secure and transparent solutions to track all order fulfillment and transactions. It also offers endless possibilities in every phase of the supply chain management of e-commerce.

The blockchain-developed e-commerce platforms document every single transaction when a single product changes hands. This means these e-commerce stores can easily create a permanent history of every product, from manufacturer to sale.

But when you implement blockchain technology in your e-commerce business, it will eventually reduce time delays, added costs and human error that disrupts transactions in today’s time.

You will have surety that the recorded data is transparent if you implement blockchain technology in the supply chain. It also assures that any modifications in the quality or quantity will be analyzed and tracked. Because of this reason, we are expecting that Blockchain technology will be a boon in the e-commerce industry for retailers and customers.

Wrapping Up

Blockchain is not the future but the present trend in the e-commerce industry. Many big companies like Amazon and eBay have already started implementing Blockchain technology to reduce the work process and remove the dependency of middlemen, and third-party organizations from their business model.

Blockchain technology will save a lot of time in the process ranging from inventory management, order placement, delivery operations, and other e-commerce related functions. Soon, blockchain technology will penetrate the whole e-commerce market.

So if you also wish to develop such a blockchain-based e-commerce platform, then contact the renowned e-commerce development company.