The blockchain in retail market was valued at USD 113.72 million in 2019 and is expected to reach USD 1936.68 million by 2025, at a CAGR of 60.4% over the forecast period 2020 - 2025. Transparency in retail supply chain, as well as demand for improved customer service, is driving the market growth.
- Consumer demand for fast, frictionless transactions is leading to sharp increases in mobile and online e-commerce fraud?and their associated costs. According to the “2018 LexisNexis True Cost of Fraud” report, the cost of fraud for midsized to large merchants is $3.20 for every $1 of fraud.
- Scalability and interoperability are the factors necessary for blockchain adoption. This is only possible when industry standards are set, which is at a lagging phase right now. Telecom sector is struggling with mass adoption of blockchain technology.
Scope of the Report
Originally used only for financial transactions, blockchain has expanded its roots to other industries including retail, which is changing the way retailers and suppliers are earning consumer loyalty. It makes the retailers equipped to deal with challenges in transaction management, customer service or inventory management.
Key Market Trends
Smart Contracts to Dominate the Market
- Smart contracts allow computer code to execute on its own when specific conditions are met. In the telecom industry, it is expected to witness significant adoption as it provides scope for automation in their internal operations, like billing, supply chain management, and inventory management.
- Smart Contracts can help in automating payment process for online as well as offline transactions. It can help to save time and cost for companies by removing the merchant (middleman), who charges extra for authenticating the transaction.
- Furthermore, in doing so, companies also save money by spending less on auditing and accounting as the process is automated.
Asia-Pacific to Witness the Highest Growth
- Asia is a major player in the changing retail landscape, owing to the rise in e-commerce startups. China leads the e-commerce market, with Alibaba recently opening a pop-up store in Australia and reflecting the ’phygital’ trend toward digitally-enhanced offline experiences.
- To retain the data authenticity generated by retail industry (for instance, customers’ shopping data for personalization), there is a move toward cloud, and hence, its security is of utmost importance.
- Consumer goods industry is expected to adopt blockchain due to its potential in areas like customer loyalty, retail and supply chain management.
- In case of frauds, the retailers would be able to react faster and take proactive actions to identify and remove counterfeit products from their supply chain.
The market is fragmented with many existing and new vendors coming up with solutions for small and large, online as well as offline retailers.
- July 2019 - A consortium of Australia-based financial services companies teamed up with IBM and shopping center operator Scentre Group to launch a pilot that puts retail lease bank guarantees on a private blockchain.
- July 2019 - Nestle partnered with OpenSC, a blockchain platform, to develop the distributed ledger system which will be separate and distinct from Nestl?’s ongoing participation with IBM Food Trust blockchain.
- June 2019 - Russia’s third largest food retail firm, Dixy implemented blockchain technology in its corporate finance system. The Moscow-based retailer has deployed blockchain in cooperation between suppliers and factoring firms, which represent third parties that purchase businesses’ invoices at a discount in order to help those businesses to raise funds.
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