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Rakuten Taps Chinese Blockchain Firm for $60 Billion Authenticity Market

In 2008, at least 54,000 Chinese babies suffered after ingesting formula that had been contaminated. Demand for safe products has grown year over year, every year, since then. Companies like blockchain-centric Techrock have capitalized on this market by finding unique solutions to the authenticity problem. Techrock uses the blockchain to track every step of a product’s lifecycle and rewards consumers for verifying it through their mobile phones.

Chinese Consumers Increasingly Willing to Pay a Premium for Authentic Imported Food

In China, it is reportedly difficult to get authentic products. Some researchers have found that more than 90% of the food sold in China is faked in one way or another.

For non-food products, this isn’t such a big deal; but there are some markets where it’s life and death – such as baby formula and other food products, which can have deadly side effects. According to Techrock, which spoke to CCN about their recent partnership with Rakuten, the situation has created a market for authentic goods as large as $60 billion per year.

Techrock uses blockchain technology in two aspects of its business. On the one hand, it offers a loyalty program for customers who use the service to purchase authentic products. On the other, it creates a permanent record of a product’s authenticity.

From Supply Chain to Reward Points, Blockchain’s Role

Every product in Techrock’s store has a digital representation on the blockchain. The company has developed a reputation for delivering high-quality, authentic goods, and it’s applying the same process to its Rakuten “zone.”

Their target market is less about authentic shoes or electronics and more about health supplements and other things which people prefer not to risk. The loyalty program helps them retain customers, and using the blockchain for it, the points have no expiration date. A side effect of Techrock’s Tael loyalty program is that it introduces many people to blockchain for the first time.

Techrock recently entered a partnership with Japanese retail giant Rakuten to get authentic Japanese goods to customers. Rakuten has long had an interest in blockchain companies, but it only touches the technology in a tertiary way here.

Rakuten is looking to expand its reach in China, where it is far from the leading retailer. By contrast, Alibaba is the boss in China – but Alibaba’s eBay-style product suffers a lot of knock-off problems that the rest of the Chinese market does.

Growing Year-Over-Year

Built on Hyperledger, Techrock’s labeling technology ensures that products are real. The customer can verify this with an app on their phone, and once they do so, they earn their reward points at the same time. The rewards can be used to purchase more goods in the store, which encourages customers to keep using Techrock.

Techrock’s partnership with Rakuten means that Chinese customers don’t have to worry about fakes, and they have streamlined access to authentic, safe products. Techrock Co-Founder Alexander Busarov told CCN:

“We already sell in over 220 or 230 cities where our consumers are located. It’s all sent by the local dealer companies. We think our business will grow as the demand grows.”

China is reportedly the largest market for both food and firms that verify the safety of food. Consumers have been driven online as they continually lose trust in local vendors. Regulations and other issues make it such that local companies, like Techrock, will ultimately supply the demand.

Techrock’s partnership with Rakuten is notable because they’re the third to secure such a partnership – JD.com being one of the first – and they are built entirely on blockchain.

Source: Rakuten Taps Chinese Blockchain Firm for $60 Billion Authenticity Market

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China Offers Special Breaks To Attract Taiwanese Startups, But Only 1% Find Success

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Hung Hsiu-chu (brown coat), former head of Taiwan’s Nationalist Party, and her delegation visit Vstartup, a startup group, in Beijing in 2016. (Photo: VCG/VCG via Getty Images)

Taiwan’s government says many of the island’s young entrepreneurs are ready to seek their fortunes in China because mainland officials are offering incentives for them to launch their startups in the world’s second-largest economy. China has been reaching out to Taiwan’s investors as part of its efforts to bring self-ruled Taiwan closer to the mainland. China claims sovereignty over the island, where a government opinion survey released in January showed that more than 80% of its citizens prefer autonomy.

But only 1% of the Taiwanese-backed startups in China succeed, according to Taiwan’s Mainland Affairs Council. “They’ve run into some difficulties,” says the council’s spokesman Chiu Chui-cheng. “We’ve reminded our youth to beware of the risks.”

Startups tend to fail due to a lack of savvy about China’s business environment, not the level of incentives, people close to the market say, and they tend to find success by localizing their businesses.

Language fluency, office space, rent breaks and cash

Localizing might come easier to Taiwanese founders compared to peers further afield. They speak China’s official language and get the culture, says Lin Ta-han, CEO of the crowd-funding consultancy Backer-Founder in Taipei.

To help, government agencies in China are said to be offering tax breaks, fast-track permits to set up offices and subsidies for startups in sectors such as healthcare. “For truly small enterprises or for first-time startup founders, these are definitely incentives,” Lin says.

A startup incubator near Shanghai, for example, is offering free office space, subsidized rent for housing and tax breaks, according to a report in the Japan Times. Some entrepreneurs can qualify for up to $31,000 in cash. About 50 other hubs like this one are spread around China. These measures complement 31 broader incentives that China introduced in February 2018 to bring Taiwanese investors and workers over. Those measures cover breaks on taxes and land use. Taiwan’s government responded with its own rack of incentives to keep business people onshore.

More on Forbes: China Now Boasts More Than 800 Million Internet Users And 98% Of Them Are Mobile [Infographic]

Among the more successful Taiwanese-operated startups, MIT Media Lab graduate Edward Shen sold his Taipei-based startup StorySense Computing in 2015 to a firm in Beijing, according to a report from Tech in Asia. His company’s flagship product was a phone number search app called WhatsTheNumber.

Incentives alone won’t be enough to ensure success in China, says Steven Ho, a former Yahoo employee in Taiwan who moved to the mainland in 2012 and started a company that helps new brands enter the market. Internet startups must understand that “there’s the internet and the China internet, two different worlds,” says Ho, 51, and back in Taipei running a company with 400 employees. China’s internet is dominated by local firms and government controls. Startups from anywhere, incentivized or otherwise, need to adapt their businesses to the local conditions rather than continue operating as did at home, he says.

“The absolute number of people in China is big, but that doesn’t correlate to the number of startup successes,” Ho says.

Taiwan government warns of failures

Taiwan’s Mainland Affairs Council reiterates the message by reminding entrepreneurs that the competition in China is “stiff” and some founders may not adapt well to a different set of laws, customs and societal norms there. And perhaps most important of all–a different financial system.

To get paid online in China normally requires a deal with the domestic payment services Alipay or Wechat, which “tend to be stricter on the services that can be sold” compared to overseas peers, says Danny Levinson, past chairman of the American Chamber of Commerce Shanghai’s IT committee.

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KKDay CEO Chen Ming-ming plans to expand his company’s travel services in China after receiving venture capital from an Alibaba fund for Taiwanese entrepreneurs. (Photo courtesy of KKDay)

Courtesy of KKDay

As a news reporter I have covered some of everything since 1988, from my alma mater

Source: China Offers Special Breaks To Attract Taiwanese Startups, But Only 1% Find Success

China’s Ping An Insurance Firm Partner With Sanya City Authorities to Build DLT-Powered Smart City – Ogwu Osaemezu Emmanuel

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Ping An Insurance Group, a highly reputed China-based insurance corporation has joined forces with the Sanya municipal government to develop a “smart city” that would be powered by blockchain technology, artificial intelligence (AI) and other new technologies,” according to a local news source, People’s Daily on November 14, 2018. Per sources close to the matter, in a bid to contribute its bit to urban development in China, Ping An Group has reportedly inked a strategic agreement with Sanya Municipal People’s Government to construct a “Smart City” run entirely by innovative technologies including the revolutionary blockchain technology, big data, artificial intelligence, and others…………..

Read more: https://btcmanager.com/chinas-insurance-dlt-powered-smart-city/

 

 

 

 

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