You are currently viewing Building trust in open commerce platforms on a Digital Public Infrastructure

Building trust in open commerce platforms on a Digital Public Infrastructure

Leveraging a Public Blockchain to boost verification & authentication in e-commerce

Overview of the retail & ecommerce industry in India

India has emerged as the fastest-growing economy in the world and is expected to be one of the top three economic powers over the next 10-15 years. India has the third-largest online shopper base globally, with 14 crore e-retail shoppers in 2020, only behind China and the US. By 2026, digital commerce in the retail sector in India is expected to grow to ₹15 Lakh Crores (US$ 200 billion)[1].

Amazon and Flipkart account for the majority 60-70 percent of the Indian e-commerce market[2]. While these two market leaders enjoy a monopoly[3] there is competition from other startups (Meesho, Nykaa, etc), and Indian giants like the Tata group and Reliance group who are slowly increasing their presence in e-commerce. To lower the entry barriers for participation in India’s ecommerce story, the government is actively incubating various initiatives, one of the leading one is – ONDC[4] (Open Network for Digital Commerce).

In this backdrop, it would be appropriate to look at the key stakeholders in this ecommerce ecosystem. As depicted in the below diagram, the components of the ecommerce engine that ensure a seamless shopping experience are

  • Manufacturers / Brands – Organizations across categories, geographies, scale of operations who participate in the online marketplace (may not be the “Seller” on the shopping portal)
  • Vendors / Sellers – Original manufacturers or aggregate sellers across categories whose information is displayed online to the end buyer during shopping
  • Customer shopping experience / Marketplace
  • Payment interfaces – Banks & other payment interfaces to ease payment processing
  • Warehousing & Logistics – Storage and shipping of goods once bought, sold, returned
  • End customers / Buyers – across geographies interacting on the platform

The key attribute of the trust ecosystem is to be able to identify the source of Misrepresentation or Wilful fraud in the value chain and build adequate penal / rating mechanism to ensure transparency in the functioning of the marketplace.

Narrowing down our review to look at frauds in this ecosystem, the nature of frauds are broadly

  • Misrepresentation of information – By either Seller, Buyer or any other party in a transaction. This involves wrong reviews[5] that can influence future participants on this platform.
  • Wilful fraud – Perpetrated by selling fake products[6] by buyers, rejecting genuine products by buyers, fraud in shipping & storage of goods

The estimates of online fraud especially because of Buy-now-pay-later (BNPL) as estimated at USD 48 Bn Globally[7].

Enhancing trust by building transparency in an open ecommerce ecosystem based only on the digital profile of the participants on a Digital Public Infrastructure (DPI)

We look at the role of Public statutory data of the stakeholders involved in the ecosystem and the role of a DPI enabled on a Public Blockchain. Below is a list of statutory public information of the stakeholder that can be accessed by only authorised personnel leveraging a DPI.

  • Manufacturers / Brands – Industry specific licenses, Tax & Income information etc
  • Vendors / Sellers – Tax & Income information
  • Customer shopping experience / Marketplace – Licenses
  • Payment interfaces – Limited public data
  • Warehousing & Logistics – Business & Operating licenses
  • End customers / Buyers – Geography / Other specific information
Digital commerce ecosystem – building trust on a Public Blockchain

Trust score enabled by other metrics can ensure a transparent and reliable experience for all the stakeholders involved – Buyers, Sellers, Logistics providers etc.