Blockchain Has Been the Unexpected White Knight to this Big Industry Challenge
Counterfeiting is a ten digit, global, cross-vertical fraudulent industry. From pharmaceuticals to food processing, counterfeiting cost billions of dollars every year to industries worldwide. As demonstrated in the last couple of years, counterfeiting doesn’t only affect its direct victims but also shareholders from targeted companies (just ask Alibaba).
The fight against counterfeiting has gone through several generations of technologies and now it seems to have found a new weapon on blockchain technologies. Last week, Bloomberg published an extensive report about how companies are starting to leverage blockchain stacks to combat fraud in the food processing industry.
Food adulteration is as old as the industry itself but it has certainly increase in the last two decades with the entrance of China in the global food supply chain market. The world’s largest food producer and consumer has certainly had an impact on the raise of fraud in the food processing market and has forced companies to upgrade their digital defenses.
Enter the Blockchain
One of the most important aspects to fight adulteration in the food processing industry is to keep accurate records that prove the provenance of food. Until now, the food processing supply chain has relied on centralized, human-dependent solutions that involve a lot of paperwork and, consequently, they have proven to be inefficient and easy to tamper with. The secure, trustless, decentralized nature of the blockchain provides a unique set of capabilities to guarantee the integrity of food records. I know, I know…easier said than done…but this is happening already.
Walmart Stores, Inc is in the process of completing a pilot that tracks pork supply chain in China using blockchain technologies. Initial reports claim that Walmart has been able to reduce the time taken to track pork’s supply chain from 26 hours to just seconds. Not surprisingly, Walmart is extending the pilot to other areas.
Let’s go back to alibaba before somebody asks ;) The ecommerce powerhouse is starting to leverage blockchain technologies with food suppliers in Australia and New eland. If successful, we can see how the pilot can be implemented in china where food safety has become a major concern for Alibaba.
Certainly, a company like Alibaba can push the adoption of anti-counterfeiting solutions using blockchain technologies to several other industries. Luxury goods and pharmaceuticals are two sectors that could leverage blockchain technologies to improve traceability and integrity of records. The global reach and influence of Alibaba can be a strong catalyzer to develop a brand new generation of anti-counterfeiting solutions in areas such as reputation management, traceability, proof-of-posession and others, everything powered by blockchain technologies. In that context, alibaba can influence other merchants to adopt and be compliant with this new approach to leverage blockchain technologies for fight counterfeiting across different industries.