How is Blockchain Invading the Ecommerce Industry in 2023
Almost as long as humans have traded, markets have existed. Bazaars in the Middle East are thought to be the origin of markets, which later appeared in Europe, Africa, and Asia.
Even before the name “eCommerce” entered general usage, the long history of marketplace commerce assured that online purchasing swiftly took hold on the developing Internet platform.
When it first began in 1994, one of the early forerunners of an eCommerce marketplace was Amazon. Just over 20 years later, thanks to sales of $178 billion in 2017, Amazon recently overtook Apple as the second business to reach a market capitalization of $1 trillion. Given that their profits are only $3 billion, this is a bit of a mystery. Just $3 billion, in my opinion, as this produced a P/E ratio of 93.
It’s difficult to pinpoint exactly how many things are listed on Amazon, but given that Google has indexed 128 million pages for amazon.com and 27 million pages for amazon.co.uk, it’s safe to assume that there are a lot of products there. Customers are starting their buying experiences on the Amazon website rather than Google because, from their point of view as consumers, almost anything they desire can be found on the platform.
The Amazon Marketplace
Amazon must therefore be an excellent site for retailers to conduct business, considering the size of this market.
Although millions of buyers may instantly access Amazon, there are significant drawbacks for retailers who use this platform.
Retailers come in different shapes and sizes, some with a national network of stores and an award-winning website, while others operate out of a spare bedroom with a few specialty products. While the latter is frequently dependent on this one specific channel, the former has a wide range of sales channels and may counteract any bad effects from their Amazon Marketplace.
This sole strategy is what poses a serious risk to the retail industry, which stands to lose everything if Amazon decides to terminate the sellers’ accounts. Because of complaints from customers and alleged violations of product quality, Amazon is well known for prioritising customers over merchants and has closed many stores.
Although not exclusive to Amazon, the Amazon marketplace is a very competitive environment, which may be made worse by Amazon’s actions.
Amazon frequently encourages new vendors to post their goods in the marketplace, then keeps track of their sales information before locating a manufacturer who will allow them to sell directly to customers. With the help of this sales data, Amazon successfully copies the products, seizes control of the buy-box (the top selling position), and undercuts the original retailer on both price and customer service.
The fees they impose are another factor that favours Amazon over its marketplace sellers. These can account for up to 20% of the selling price and are computed using the price that includes VAT; hence, what is displayed as a 20% commission is actually a 24% fee for the merchant once VAT has been deducted. If they are of that magnitude at all, many merchants’ gross margins are not much higher than this.
Blockchain eCommerce Marketplace
Consumer worries are focused on privacy issues, while merchants are worried about controlling risk to their business and finding methods to cut expenses.
There is an absurd quantity of data on Amazon. They are aware of not only what we have bought but also when we made those purchases (is this related to when we get paid? ), our likes and dislikes as shown by our browsing history, time spent on a particular page, search terms, favourite brands, the time of day we browse, and a whole lot more.
Why is this information crucial to Amazon? They use it for two main purposes: first, they can target us to spend more money, and second, they can sell this information to ads.
Different is an eCommerce blockchain marketplace. No corporate organisation has control over it. Instead of keeping it in a central database, it uses a peer-to-peer network of a distributed platform to link people with one another directly.
Although it is technically eCommerce, eCommerce is the term used to describe it. eCommerce: What is it? Peer-to-peer commerce is the blockchain’s equivalent, allowing buyers and sellers to conduct business directly, transparently, and securely with no middlemen and without paying extortionate fees. In actuality, there are no costs associated with listing or purchasing goods on the majority of the current eCommerce blockchain platforms.
Therefore, unlike Amazon, which relies on third parties like Visa, Mastercard, and PayPal to process payments, a blockchain-based eCommerce platform enables direct payment between the customer and seller, frequently in the form of cryptocurrency.
And while Amazon exploits our personal information and makes money off of it, a eCommerce blockchain marketplace safeguards the users’ data.
Open Bazaar, Scanetchain, Blockscart, Soma, Cybermiles, GAMB, eCoinmerce, Bleexy, and Origami Network are a few of the more well-known blockchain eCommerce marketplaces now accessible.
OpenBazaar is a free eCommerce platform that links buyers and sellers through an online market built on blockchain technology. eCommerce is entirely free since there are no expenses associated with listing things or with purchasing them.
There is no single entity or group in charge of regulating what is listed. Every user has an equal impact on the network and is in charge of their own data and store.
More than 50 cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Zcash, Dash, and others, can be used to make payments.
Reviews, a multi-signature escrow payment mechanism, independent moderators, and other features all work to safeguard both buyers and sellers.
The first Blockchain eCommerce Marketplace, OpenBazaar, is arguably the one that is most similar to the actual decentralized peer-to-peer systems.
Currently, users must download OpenBazaar, run the installer, then list each item one at a time. Although the core developers (OB1) have declared that this is their top priority on the current Roadmap, there is neither an online browser version nor an iOS or Android App.
Since Scanetchain is more complicated than OpenBazaar, it may be attempting to give more than what customers are prepared for.
Users can utilise this decentralised marketplace to sell both their goods and content. It is designed to create a connected environment by bringing together adverts, products, and content. Because they use augmented reality (AR) technology to connect social networks, retail, content, and advertising, Scanetchain is very distinctive in this market.
A sizable ecosystem is created by Scanetchain’s combination of their social and content platforms with their music, video, and gaming platforms in addition to their commercial platforms for advertising and purchasing. Either it will become extinct or it will take over.