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More consumer goods companies across the Asia-Pacific (APAC) region will follow on the heels of the financial services firms and adopt blockchain technology over the next five to 10 years, according to Ernst & Young.
Citing a CNBC article, Chandan Joshi, partner and global emerging markets leader for consumer products and retail at Ernst & Young, noted that blockchain technology would be rolled out across the financial industry in the next five to six years.
Joshi said the consumer goods industry was likely to follow suit due to the potential value that blockchain could bring in areas such as customer loyalty, retail and supply chain management.
Specifically, in markets where fraud is an issue, Joshi said blockchain would provide consumer goods companies with real-time information across their supply chains – from procurement and manufacturing to transportation and distribution.
Based on this information, consumer goods companies would be able to react faster and take proactive actions to identify and remove tainted or counterfeit products from their supply chain, for instance.
For now, Joshi said multinational companies in APAC were the forerunners in adopting blockchain – though many were doing so through trials and experiments, limiting the value of blockchain to a small scale.
Among small and medium-sized enterprises (SMEs), Joshi said the adoption rate of blockchain remained low, due to the lack of talent and their lower tolerance for failure. As blockchain is an emerging technology, some SMEs are waiting for it to become more mature before jumping on the bandwagon it, he noted.
That said, Joshi said governments could influence blockchain adoption through incentives that encourage adoption. The ultimate decision to adopt the technology, however, lies with the companies, which must overcome their fear of failure, he added.
For enterprises that are planning to adopt blockchain technology, Joshi said data privacy was a key factor to consider.
For example, while trading assets on an open blockchain may cut costs significantly, it may not be a practical solution for enterprises concerned with data privacy since every transaction is observable by all parties in the system, said Joshi.
Other than consumer goods, Joshi noted that other industries would increasingly adopt blockchain technology to enhance cyber security, and reduce or eliminate the roles of centralised authorities.
In securing internet of things (IoT) devices, for example, blockchain could help to address the inability of IoT devices to adapt their behaviour in response to security threats without the help of a central authority, according to Joseph Pindar, director for strategy in the CTO office at Gemalto.
With blockchain, IoT devices can form group consensus about what is normal within a given network, and to quarantine any devices that behave unusually, Pindar told Computer Weekly earlier this year.
According to market research firm Netscribes, the global blockchain technology market is expected to grow at a compound annual growth rate of 42.8% and reach nearly $14bn by 2022.
North America accounted for the largest share of blockchain adoption in 2016, and is expected to dominate the overall market in the near future. However, the APAC region is expected to adopt this technology at a faster rate owing to its wide adoption in China and India.
Read more about blockchain in APAC
- Government support, the rise of digital payments and a new breed of financial services will put APAC financial technology market in overdrive over the next few years.
- Singapore’s central bank is overseeing a project that could lead to a single blockchain system being used for banks to transact with each other.
- Although blockchain is no silver bullet, experts say Australian organisations should embrace and invest in the technology.
- Singapore Airlines is launching the world’s first blockchain-based airline loyalty digital wallet app that will unlock the value of miles accumulated by frequent flyers.