Web3 in E-Commerce

Understanding Web3 has completely changed the rules of the internet. Web3 can provide a more secure, faster, and efficient ecosystem for e-commerce. It will basically create an online ecosystem with no middlemen. Any single entity will not own the Web3 platforms or store the data, so there won’t be any information filtering by any company’s algorithm.

What is Web3?

Web3 is basically the third phase of the internet. It started with Web1 in 1990, followed by Web2 in 2005.

Web1 (1990 – 2005) or the Static Web – nascent version of the internet with static text-based web pages

Web2 (2005 – 2020) or the Social Web – dynamic pages offering user interactions over social media, online communities

Web3 (2020+) or the Decentralized Web – no central entity owns or controls the platforms, and transactions are carried out without any middlemen

Basically, Web3 applies blockchain technology and other tech related to cryptography to create a new base for apps that are focused on decentralization.

Web3 = (4C + P + VS) – content, commerce, community, and context, with personalization and vertical search.

The evolution of the Web

Characteristics of Web3

Free and open-source information

Genuine and unique transaction information

Ownership of personal information

Decentralized Finance (DeFi) and crypto for financial transactions

Anonymous ownership and transactions

Advantages of web3

Privacy - Trust in the system as blockchain/web3 as the website will not have access to user profile or data

Security - Data cannot be corrupted – once the profile is generated, it cannot be modified, changed, sold, or blocked

Decentralization (Open) - Community-generated content won’t be regulated by any central controlling entity

Web3 in e-Commerce

Web3 can completely change e-commerce strategies as it can enable shopping in webshops over the blockchain. The blockchain will ensure the trustworthiness of transactions, and payment through tokens will be just as common as using a credit card.

How can Web3 be used in e-commerce?

Decentralized Finance or Crypto Wallets – Using cryptocurrencies for making payments on online commerce platforms like Shopify and WooCommerce.

Decentralized Marketplaces – Web3 will create Decentralized Marketplaces where users decide what they want to buy in a marketplace managed by the community offering freedom of exchange and giving them total control.

E-Commerce Loyalty Reward Programs – NFTs can be used to monetize loyalty programs in e-commerce. Usually, you get reward points for every transaction, which can be redeemed for discounts or products. NFT-based tokens with fixed values can replace these arbitrary points.

Unique Customer Experiences in Metaverse – Metaverse’s real-time virtual spaces can be used as a storefront to offer users unique experiences.

Use NFTs To Build Communities – Startups like POAP use NFTs to build communities based on shared experiences. Specific badges or mementoes can be earned by doing certain tasks, and you can become a part of that specific online community.

Benefits of using Web3 in e-commerce

Web3 will enable a higher level of trust and security in online transactions as the whole interaction will be immutable. Lower risk frauds and identity theft.

It will reduce the requirement of middlemen and third parties as the network will become decentralized.

Brands and retailers can combine all their e-commerce operations into one Web3-based platform and deliver world-class experiences to consumers. Brands can reach their customers wherever they are digital.

Consumers will find better e-commerce experiences powered by enhanced security, greater transparency, and personalization.

Brands can also create and design products, services, promotions, and experiences that cater to individual specifications through customer data from Web3 platforms and social commerce.

Transparency of blockchain will lead to the listing and selling of legitimate products that have not been tampered with rather than products in circulation because of fake positive reviews.

The transition from Web1 to Web2 took time, and so will the transition to Web3 despite all its benefits. The Web2 applications are quite dominant in our lives, so the transition will definitely be slower and drawn out. However, some aspects have a better and much quicker acceptance, like cryptocurrencies as a payment method.

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Companies to Watch

Pear – open, free, decentralized marketplace - https://peardao.io/

SHOPX – the bridge between blockchain and e-commerce - https://shopx.co/

Bosonportal – buy physical products in the metaverse as NFTs - https://www.bosonportal.io/

eSamudaay - https://www.esamudaay.com/

Ark of Dreams - https://www.arkofdreams.io/

Mall.Live – a metaverse shopping mall built on blockchain - https://mall.live/

Source: 

Sramana Mitra, 2007 (https://www.sramanamitra.com/2007/02/14/web-30-4c-p-vs/)

https://learn.withsmoothie.com/articles/why-web3-matters

https://learn.withsmoothie.com/articles/web-3-0

https://www.siliconroad.vc/post/what-is-web3-and-what-does-it-mean-for-commerce

https://www.vaimo.com/web3-nft-ecommerce/

https://medium.com/fabric-ventures/what-is-web-3-0-why-it-matters-934eb07f3d2b

Credit: Anyaa Mittal