If there is one country where blockchain will succeed, it is China. Nowhere is there a larger, more underdeveloped or fragmented amount of data to manage in logistics, supply chains and other areas. There are also the ever-present counterfeit scandals from fine wine to condoms to vaccines filling social feeds and state media, reinforcing doubt amongst Chinese consumers.
Even on booming cross-border e-commerce platforms–promoted as the bastion for legitimate products bought directly from the source–fakes are all too common. 40% of cross-border cosmetics sold during last year’s Singles’ Day turned out to be counterfeits. There is no shortage of reasons why Chinese are the least trusting consumers on the planet.
As a result, hundreds of solutions have surfaced to provide traceability for genuine fare. Unfortunately, few have the scale and widespread acceptance to tempt consumers to download the app or engage other tools to legitimize a product. Many of the systems themselves can be faked, with phoney QR codes pointing to bogus websites falsely claiming a product’s authenticity.
Blockchain is the first tracking standard that is receiving widespread acceptance from consumers, businesses and government in China. Alibaba and JD are investing large sums into blockchain and President Xi Jinping calls it a “breakthrough” technology. 41% of Chinese startups who received funding in Q1 2017 were blockchain related.
Shanghai, Guangzhou, Shanxi, Henan, Guiyang and Hangzhou all have policies actively encouraging blockchain development, with Hangzhou pledging investments of ¥10 billion ($1.5 billion) in the technology. It was one of the most talked about topics at the World Economic Forum’s 2017 Davos, where it was estimated 10% of global GDP will be stored on blockchain by 2027.
Beyond the hype, it’s important to remember that blockchain is a nascent technology, and widespread adoption, profitability and expertise is yet to come. In many industries, blockchain has become well integrated into the vernacular, but a large majority still struggle to understand what it really is. Like any new technology, there are countless prospectors hoping to cash in, several unanswered questions and many misnomers related to blockchain.