Five Ways Blockchain Will Rewire India's Retail and E-commerce Sector

Blockchain is a secure way of recording information that cannot be altered or hacked providing an irrefutable data platform.
Five Ways Blockchain Will Rewire India’s Retail and E-commerce Sector

Blockchain, like NFTs or the Metaverse, is a digital innovation that we have all heard about, but find hard to grasp or relate to immediately.

While blockchain is perhaps no longer as fresh as NFTs and the Metaverse, it is poised to make a big impact throughout India in the near term - serving as the ‘transactional backbone’ for its burgeoning e-commerce sector and retail industry rebound.

What is Blockchain?

Blockchain is a secure way of recording information that cannot be altered or hacked providing an irrefutable data platform. In practical terms, it is a digital ledger of transactions that can be securely duplicated and shared across computer systems. The ledger is a ‘chain’ made up of individual ‘blocks’ of data - hence blockchain - and every time a new transaction occurs on the blockchain, a record of that transaction is added to every ledger, making it transparent, open, and accessible.

India Joining the Blockchain Party 

While blockchain supports the transaction of cryptocurrencies like Bitcoin or Ethereum today, diverse companies are tapping its ability to improve customer relations, supply chain traceability, efficiencies, and cost savings, and here in India, many organizations are joining the blockchain party fast.

Local banks are adopting the technology, while 56 percent of businesses are moving to make it a core part of their operations. Government agencies are also trialing blockchain-powered projects, and students throughout India are studying blockchain in big numbers – all from the government’s initiative with the National Blockchain Framework (NBF).

Blockchain’s migration to the mainstream will accelerate as it extends its influence and impact into the retail and e-commerce sectors and here are five ways it will make a difference: 

Powering and Connecting E-commerce and Payments - Blockchain is already making its presence felt in India’s e-commerce sector, which is predicted to grow by a staggering 21.5 percent in 2022. Blockchain is an e-commerce accelerator because it provides a secure method of storing and sharing payment information. Its distributed ledger technology allows retail companies to collaborate closely, easily, and transparently with all supply chain partners including distributors, retailers, importers, and more. Instead of each player maintaining a database, blockchain provides a unified payment and transaction platform for all participants. 

Improve Supply Chain Transparency - Blockchain technology – which provides transparency, real-time data, and shared ledgers – puts all transaction stakeholders on the same page. 

Physical assets, for example, can be digitized to enable retailers to track their stock, and customers to monitor their orders at any stage, and anywhere across supply chains or selling channels. 

A high level of visibility builds trust, and peace of mind for all parties, and this was much needed during our lockdown periods when retailers struggled to keep stores open, maintain stock levels, and keep supply chains moving, and employees safe.

Removing Third-Parties - Blockchain benefits extend to end-users too. Its distributed ledger is a database shared that is synchronized across multiple sites and is accessible by multiple people, reducing transaction costs by taking out the need for third-party organizations to manage data. 

Bypassing third parties, that use centralized databases, also reduces the risk of fraud and data theft. 

Blockchain enhances security and privacy because all transactions are independently processed and verified and cannot be altered or deleted. It also enables faster transactions, with 24/7 processing reducing transaction times.

Protecting Customer Data - While loyalty programs have yet to be fully embraced by Indian consumers, blockchain can help to attract more customers to sign up for campaigns. To ease data security concerns, blockchain protects customer data by allowing them to exchange tokens for rewards without compromising security. 

Enhancing Loyalty Programs - Blockchain also offers the opportunity for diverse brands to work together by creating a consolidated loyalty network, allowing customers to accumulate loyalty rewards within a single ‘wallet’ and redeem them from the partner companies.

Partner companies can collaborate through blockchain to enable customer exchanges without centralized management – for example, by deploying smart contracts to manage terms, automate processes and reduce organizational costs.

Benefits offered by loyalty programs can also be extended thanks to blockchain’s ability to run reward programs like a cash-back program –where the currency is stored in a digital wallet and can be redeemed at any time. 

No Turning Back

Blockchain is here to stay – its ability to change how information is stored, shared, and owned will transform and power India’s a retail and e-commerce sectors in the years ahead. Consumers, retailers, suppliers, and other business partners will benefit from increased speed and reduced costs while enjoying security and peace of mind to win the trust of all stakeholders. 

For tech entrepreneurs and digital-facing businesses, trust is the most important driver of success, and blockchain – which doubles down on transparency, security, and openness – is the current “gold standard”. The prospect of a blockchain-powered future is bright across India’s e-commerce and retail landscapes and it will be exciting to witness the new milestones and innovations that will inevitably emerge as a result. 
 

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