It’s a common phenomenon that whenever a new trend is introduced in the market, its taken with a pinch of salt. The same has happened with Amazon in 1994, followed by eBay when it started in 1995. It was said that the online stores were going to be a flop idea, that people were not going to accept or shop at these stores yet they became a reality, over the past few years. Today, there is a whole marketplace of these stores online. From product distribution to demand and supply, E-Commerce is now a reality that cannot be negated. With these developments taking place and online stores growing at an exponential rate, there is great scope for blockchain implementation in the E-commerce sector.
The evidence of online marketplaces growing rapidly can be estimated from the amount of annual growth, happens to be 50%, that Alibaba made in years 2014-2016 each. Similarly, Amazon witnessed the growth of 55.8% per annum. The expected turn out till the year 2020 is supposed to be $ 4 trillion in the E-Commerce markets.
As online marketplaces such as Amazon, Ali Express, Alibaba, and eBay are dominant cross-channel stores, the economy generated from these stores has multiplied in the past couple of years. Its believed that 34% of labor in the US is part of gig economy, which is expected to grow up to 43% by the year 2020, as remarked by Brad Smith, CEO of Intuit (INTU). In this statement, the owner referred to all the freelancers that have bee associated or are working with taxi companies like Uber or Lyft as well as are working as plumbers or electricians.
A survey conducted by INTU has indicated that a presence of 4 million gig workers in the US, however, the growth rate over the past few years dictates that the number is going to grow to 7.7 million by 2020. The global firm McKinsey has declared that the exact number of freelancers cannot be found, but its assumed that they roughly make up to 68 million, as registered by the US Labor Department.
There is a chance that freelance work might replace the 9-5 traditional time slot. A great number of people today are making entry into the online business world through forums like Upwork, Fiverr, TaskRabbit and more, that can allow you to work at your convenience, remotely. These platforms collectively can be called a centralized marketplace.
Services that are offered by these online markets have a variety of range, they can serve their customer by mending a broken sanitary line to providing business designs and giving consultancy and managing accounting and finances.
The loopholes in the system.
All the above mentioned platforms like Upwork, Project4Hire and more run on a centralized system. there is one internally developed system that connects the worker with the seeker. No matter how centralized or integrated the system is, there are still found loopholes in there, that lead to compromise on the transparency and effective operability of the entire platform. Whenever a customer checks in to an online marketplace, he aims at getting the best service possible with the guarantee of trust and satisfaction.
There is no fixed formula on which these marketplaces work. They keep altering the service charges or commodity prices, which really confuses the buyer and seller, as well as stands as a hindrance in searching for the right party. These marketplaces, although are centralized but allow users to come in as anonymous entities and usernames, therefore, identification of an authentic labor is not an easy task for the buyer.
Blockchain Technology: Next Place for Online Marketplaces.
Blockchain technology has been seeing an overwhelming growth in the past two or three years. The technology is considered to be revolutionizing the world and is expected to be witnessing a growth of 61.5% till the year 2021. Widening the scope of the blockchain, many blockchain implementation companies are exploring different industries to broaden their client base. There is a huge amount of investment that has been poured into this technology, the initial coin offering (ICO) or tokenization has grown up to $2 billion from the amount of $256 in the beginning.
The analyst research note for the year 2017 said that the private investment that was put in blockchain companies has been nearly $4.5 billion as of now, which is a sharp steep from the $624m that was put in it in the year 2016. Alongside this, many blockchain based companies are aiming to explore the possibilities that are present in different businesses for them. The same companies are also providing decentralized platforms to further the peer to peer interaction in through blockchain.
The online social market, commonly known as Soma, is also a new blockchain based platform where users are allowed to purchase and sell their items. It’s a social marketplace where people, after creating cards that represent the commodity, can come, sell and shop goods with their shopping history saved and feedback recorded.
The ICO that was started in the month of September 2017, is used to classify the fraudulent elements present in the markets like Alibaba, eBay or Amazon.
This is an observed phenomenon that markets gain profit by guaranteeing a fine product to the customer and giving them security about the worthiness of the product. Blockchain through the implementation of its services is giving customers of the online markets an option to make the most secure purchases ever. It also offers them the chance to buy with a digital currency or token, that can be exchanged with real assets or real currencies like USD or Pound Sterling. The buyer can also buy SCT and use it on the platform, while the seller if agreed (as the digital currency and tokens are decentralized and unregulated), he can use SCT as a means for payment. This is the way that works opposite to all traditional platforms. Clients here contact the seller directly without the interference of a middleman, this gives a better communication at a lower fee.
The biggest advantage that the blockchain gives to its user is its helix or chain-like structure. A blockchain is a ledger or database that can maintain a record of all transactions that take place on the forum. The participants on the platform that is of the blockchain, requires registration of them and then grants access to view and audit the finances present on the system.
The regulation and audit of transactions give a fair pricing to the clients. customers can select the provider and list their needs to see which price best suits them financially and practically.
Startups and blockchain.
Some startups are offering digital services to make apps and websites to find, review and make bookings with the service providers. These startups are dependent on decentralized blockchain implementation services to serve in the marketplace.
These developing software are connecting and enhancing communication between the involved participants. There is a set of conditions that is placed by the seller in the system until the buyer fulfills the conditions, the rights are not transferred to him. This ends the trust issues of the seller and saves him from any fraudulent activity.
The blockchain platform that makes a peer to peer interaction possible, a relation between buyer and seller in a more secure setting is built. The technology of blockchain ensures security and transparency that establishes a better trust between parties and gives safety to all the information that is present on the blockchain. it also eliminates the need for a middleman and only genuine buyers and sellers can come to play in this field. Today, startups are proposing great hope for new technologies with blockchain implementation in their businesses.