March 28, 2017
Bitcoin is near record highs again, but its widespread adoption as an online payment method is as far away as ever. The blockchain technology that underlies Bitcoin, on the other hand, could help fight a type of fraud affecting online marketplaces if an Alibaba pilot program produces positive results. The world’s largest online retailer has enlisted the help of PwC, AusPost and Australian supplement maker Blackmores to attack counterfeit fraud in a specific online vertical—food.
“Food fraud is a serious global issue that not only costs the food industry billions every year, but puts consumers’ health at risk,” said Alibaba ANZ managing director Maggie Zhou. “The signing of today’s agreement is the first step in creating a globally respected framework that protects the reputation of food merchants and gives consumers further confidence to purchase food online.”
The companies will use blockchain technology to improve the traceability of products procured online—in this case, food—as they move through the supply chain. The Blockchain creates greater transparency between buyers and sellers, improves security and reduces the risk of fraud because the ledger is considered immune to tampering. If the pilot is successful, Alibaba said it could apply the model to all its e-commerce markets.
Counterfeit products have been a problem for online shoppers in China since e-commerce first appeared there. In fact, the company’s Alibaba payment method is an escrow-based system created specifically to increase consumer confidence that they would not be stuck with counterfeit products.
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