Alibaba launches blockchain initiative for T-Mall

Chinese e-commerce giant Alibaba is bringing its logistics arm Cainiao together with its online marketplace T-Mall to introduce blockchain technology to track goods on the platform.

Several media outlets published reports referencing China’s news agency Xinhua saying that the partnership would see logistics information, such as country of origin, shipping port, transport method, arrival port and customs and inspection details, loaded onto a blockchain to improve the traceability of goods for import and export across China’s borders.

Alibaba paid $807m last year to have a controlling stake in Cainiao in a bid to improve logistics, at the same time announcing a $15bn investment over five years to expand the global logistics network.

Blockchain is the technology that underpins the digital currency bitcoin and is essentially a digital database of time-stamped records or transactions, which is becoming increasingly popular as a track and trace tool for physical supply chains.

According to reports, Alibaba sees the technology as more than just a tool behind the cryptocurrency bitcoin, and is particularly interested in blockchain’s virtual security where records are unable to be hacked or tampered with.

This would give consumers peace of mind by allowing them to verify the goods they purchase online via a smartphone app – a big coup for Alibaba, which has faced intense criticism over the prevalence of fake goods available on its platform.

“Blockchain’s defining quality is that the data can’t be modified,” Tang Ren, Cainiao’s senior technical expert for international logistics, said in a statement. “With logistics data being uploaded from all parties, such as retailers and customs officials, buyers can cross-reference every detail of their purchases. Any attempts to conduct data fraud or add in counterfeit products will be as difficult as landing on Mars.”

It is understood that Alibaba is setting up a traceability page on its platform where consumers can track and authenticate some 30,000 products from 50 countries, which is believed to cover 80 per cent of third-party sellers on T-Mall. The initiative will cover ports in Shanghai, Shenzhen, Guangzhou, Hangzhou, Tianjin, among others.

According to Sixth Tone, Chen Liangiun, a spokesman for Cainiao, told the website that T-Mall has been working with Cainiao on a trial basis since November’s online shopping festival Singles’ Day.

“Cainiao has created this global logistics network, so there’s more information available to consumers,” Chen said. “And with blockchain technology, the data can’t be tampered with.”

Alibaba’s move follows its rival JD.com, which last year established a blockchain cross-border traceability alliance with several international brands, industry regulators and logistics companies, and this year joined the Blockchain in Transport Alliance initiative.

Alibaba has already moved into the blockchain space however. Last March, the firm announced a pilot scheme with PricewaterhouseCoopers (PwC) to use blockchain to improve integrity and traceability of its food supply chains on its platforms.

Meanwhile, Alibaba has announced that it provided law enforcement authorities with more than 5,400 tips on the online sale of suspect products in 2017, leading to the identification of 63 criminal cases involving counterfeit goods. This resulted in 129 people receiving criminal punishments.

While these moves are positive, the e-commerce firm has called for tougher penalties, including fines, to act as a stronger deterrent against counterfeiting.