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The world consumer goods market is dominated by retailers, who have practically monopolized this economic sector. Every day, thousands of producers prepare their products for sale, and millions of buyers head to stores to buy them. A thin layer of retail chains controls the entire process and sets its own game rules for a market that will be worth $8.5 trillion in three years (according to findings by the analytics company Persistence Market Research).
The path goods take “from farm to table” ends up extremely long because of the presence of middlemen—retailers—in the retail chain. In the US, products typically “travel” 1.5 miles from the supplier to the shelf at the supermarket. In Britain four grocery retailers control 76% of the market. These middlemen increase the prime cost of goods by up to 50% and add their expenses to the final price. The ability to compensate themselves for costs by increasing prices results in the retail chains’ misallocation of the goods received. A third of the goods delivered to stores ends up in the trash. In addition, because of selection and competition from stronger players, not every supplier can secure a spot on supermarket shelves.
This outdated model makes losers out of both key parties in this process, the producer and the seller. Instead of simply striking a deal, they have to spend time and money so that the retailer can increase its profits. The development of new technology can fundamentally change the situation by removing the expensive middlemen from the process. Finding a solution for this problem is being tackled by INS Ecosystem, a company developing a decentralized ecosystem for consumer goods.
The INS Ecosystem platform is based on blockchain and uses smart contract technology. The platform is intended for interaction between suppliers, end consumers, and logistics operators. Only they set the selection, prices, and demand for goods. The terms of the platform are the same for everyone, so even small producers can display their products. Suppliers receive more accurate information on their buyers, gain a better understanding of their needs, and can launch targeted loyalty programs. In addition, the producer completely controls the goods distribution and delivery process.
The most apparent benefit to buyers is significant savings. Due to the absence of middlemen, INS Ecosystem makes it possible to save up to 30% on daily purchases. Anyone can buy the products they need in just a few clicks through the website or mobile app. The system will automatically process the order and send it to the supplier, who will deliver the chosen goods to the buyer with the help of a logistics company. Smart contracts allow for the creation of a transparent, reliable, and effective system for settling payments.
The INS Ecosystem project was launched by the founders of Instamart, Russia’s leading grocery delivery service. The service has raised over $10 million from venture capital investors, and in its four years of operation it has completed over 100 thousand orders. The company’s founders have significant experience in retail, technology, and e-commerce. A total of 35 people are working on the INS Ecosystem team, and the advisers include major experts in blockchain and retail sales. The company already has preliminary agreements with producers such as Mars, Reckitt Benckiser, Valio, and FrieslandCampina. Within the next two years, INS intends to launch the project in ten of the world’s largest cities.
The company’s ICO will start on November 27, when investors will be offered 90 million tokens. The tokens can be purchased with Bitcoin, ether, or altcoins, or via bank transfer. Token holders can use them to make payments in the ecosystem or to launch loyalty programs and ad campaigns.