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December1,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Blockchain Summit and AI Tech World: Blockchain Can Bring Transparency to the Supply Chain and AI Can Improve the Customer Experience
Thisweek,FGRT’sLondonteamattendedBlockchainSummitandAITechWorld,twoeventsonblockchainandartificialintelligence(AI)technology,respectively.Pointstouchedonduringpresentationsattherespectiveeventsinclude:
1) Blockchainisarelativelylow-costandflexibletechnologythatenablesmanufacturerstoworkdirectlywithsuppliers.Thetechnologycouldhelpsolvetheproblemofcounterfeitproductsinthepharmaceuticalandluxuryindustries.
2) Initialcoinofferings(ICOs)areheretostayasafundraisinginstrument,butitwillbeparamounttointroducegoodgovernancetoensureitsfutureexpansionandtoavoidregulatorycrackdowns.
3) AIistransformingretailingbyenablingabettercustomerexperience,enhancingpersonalizationandmakingitpossibletoanticipatecustomerdemand.AIcontributessignificantlytotheefficiencyofbusinessoperations.DataprotectionisseenasthesinglebiggestchallengeintheadoptionofAIinretail.
FGRT’sLondonteamattendedBlockchainSummitandAITechWorld,twoeventsonblockchainandAItechnology,respectively,andtheirapplicationinindustriesincludinge-commerce,logistics,financeandbanking.BotheventstookplaceatOlympia,London—BlockchainSummitonNovember28andAITechWorldthefollowingday.Here,wereportourkeytakeawaysfromthepresentationsweattended.
BlockchainBringingTransparencytotheSupplyChainAtBlockchainSummit,weattendedatalkabouttheimpactoftheblockchainonthesupplychainanditsplayers.ParticipatinginthediscussionwereJodyCleworth,CEOatfreightforwarderMarineTransportInternational;JosephWreford,StrategyConsultantatconsultancyfirmAccenture;NickWilliamson,FounderattechfirmQadre;andChristopheOzcan,BlockchainTechnicalExpert—FranceattechfirmCrypto4All.ThepresentationwasmoderatedbyMaggieSlowik,SeniorResearchAnalyst—ManufacturingInsightsEMEA,atmarketresearchfirmIDC.
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December1,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
• Wrefordstatedthatblockchainisarelativelylow-costandflexibletechnologythatenablesmanufacturerstoworkdirectlywithsuppliersandtocutoutthepartiesthatdonotactuallyaddvaluetothesupplychain.
• Weareattheearlystageoftheapplicationofblockchaintechnologyinindustry,andcompaniesshouldconsiderwhetheritmakessensefortheirbusinessbeforetappingintoit,accordingtoWreford.Thereishugepotentialforfast-movingconsumergoods(FMCG)companiestoapplythetechnologytoprovidetraceabilitywithinthesupplychain.
• Therearealreadyexamplesoftheapplicationofblockchaintechnologyinthemanagementofthesupplychainwithinthewinemakingindustry.Wineproducersusethetechnologytoensurethatfarmerssupplygrapesthatmeetcertaincriteria,suchasbeingfreefromtheuseofpesticides,Ozcanillustrated.
• Theblockchainisusedtopreventcounterfeitproductsinthepharmaceuticalindustry,anissuethataffectsdevelopingcountriesinparticular.Globally,30%ofpharmaceuticalproductsarecounterfeitedbecauseofthelackoftransparencyinthesupplychain,Williamsonstated.
• Anotheruseoftheblockchainincludesthepreventionofcounterfeitsinluxuryandfashionbyintroducingcryptographicidentity—atamper-proofchipembeddedintheproduct—totracktheauthenticityofitems,Williamsonadded.
• Appliedtofreightforwarding,theblockchainenablesdatasharing,createstrustandunleashesautomation,accordingtoCleworth.
• Finally,Wrefordremarkedthatapplyingblockchaintechnologytoexistingoperationsprovidestheopportunitytorethinkthecurrentsupply-chainprocessandtoidentifywaystomakeitmoreefficient.
TheFutureofICOs:GoodGovernanceorGoodbyeAlsoatBlockchainSummit,weheardAleksNowak,CIOatdigitalassetsexchangeplatformBlockEx,speakaboutthecurrentstateandfutureprospectsofICOsasacorporatefundraisinginstrument.
ThefirstICOtookplaceinJuly2013withthelaunchofdigitalcurrencyMastercoin.Ethereum—ablockchainwithsmartcontractfunctionality—wasthenlaunchedinAugust2014.Sincethen,theICOmarkethasgrownexponentially.ICOmarketcapitalizationalmostdoubledbetweenJulyandSeptember2017,goingfrom$50billionto$98billion,withcompaniessuchasdatastorage-sharingFilecoinraising$250million.
TherapidgrowthofICOsdrewtheattentionoffinancialauthoritiesconcernedaboutthelackofregulationswithinthesector.AregulatorycrackdownwasimplementedinChina,wherethegovernmentintroducedatemporarybanonthefundraisinginstrumentinSeptember2017.IntheUS,thefinancialauthoritiesequatedICOstosecuritiesand,assuch,ruledthattheyneedtoabidebythesamelegislation.
Despitetheregulators’interventions,NowakbelievesthatICOsareheretostayandthattheinstrumentwilltransformthewaycorporateswillraisemoneyinthefuture.However,NowakstressedthatitwillbekeytointroducegoodgovernancetoensurethefuturesuccessofICOsasafundraisingtool.Inparticular,ICOissuersshoulddemonstrategoodgovernance,soundmanagementandeffectivefinancialcontrols,whileinvestorsshouldundertakecommercialandtechnicalduediligencebeforeinvestinginICOstoassesstherealpotentialofthecompanyraisingcapital.
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December1,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
• WediscussICOsinmoredepthinourreportICOs:TheRiseofaBlockchain-BasedFinancingInstrument.
AIforaBetterCustomerExperienceAtAITechWorld,weattendedtwopresentationswithparticipationbyprominentBritishretailers.
• Inthefirst,WhatDoesAIMeanforDifferentIndustries,AnthonyMorris,DirectorofStrategyandAnalyticsatconsumerelectronicsretailerDixonsCarphone,discussedtheimpactofAIonretail.
• Inthesecond,UsingMachineLearningandAnalyticstoEnhanceConsumerExperience,DanielNelson,HeadofDataatonlinegrocerOcado,andSteveLimbirons,BusinessIntelligenceProgramManageratdepartmentstoreHouseofFraser,sharedtheirinsightsontheapplicationofAIintheretailers’operations.
Herearethekeypointsfromthetalks:
• AIistransformingretailinginmanyways.Theabilitytoeffectivelyanalyzeshoppers’dataishelpingretailersenhancethecustomerexperienceandtopredictconsumerdemand,makingoperationsmoreefficient,accordingtoMorris.
• AtHouseofFraser,AIisprimarilyusedtoprovideamorepersonalizedshoppingexperienceforcustomers,Limbironssaid.Inparticular,AIhelpstosendrelevantmarketinginformationtocustomers,andhasbeenusedtoredesignthelayoutofstores—basedontheintelligencegatheredoncustomers’behaviourin-store—tomakethebrick-and-mortarshoppingexperiencemoreseamlessandeffective.
• AtOcado,AIissuccessfullyappliedtoreducefrictionwithinthecustomershoppingexperienceandtoincreasethespeedofdelivery,Nelsonshared.DemandforecastingisanotherkeyapplicationofthetechnologyatOcado.AIenablesretailerstohelpcustomersfindwhattheywanttobuy,resultinginbettersalesconversionrates,Nelsonadded.
DataprotectionisthesinglebiggestchallengethatretailersseeintheimplementationofAIinbusinessoperations,whichwasunanimouslyagreedonbyspeakersatbothtalks.Inparticular,compliancewiththeEuropeanUnion(EU)GeneralDataPropectionRegulation(GDPR)isperceivedasparticularlychallengingbyretailersusingcustomerdata.
• Morrissaidthatitisimportanttobeabsolutelyclearwithcustomersaboutwhattheretailerisusingtheirdatafor.
• Nelsonnotedthattransparencyiskeywhenusingcustomerdata,andthatretailersneedtostateclearlywhattheoutcomewillbeandwhatbenefitsthecustomerwillsee.
WediscussinmoredepththechallengesthattheimplementationofGDPRposestoretailersinourreportTheGDPRandEUDataProtection—ChallengesAheadforRetailers.
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December1,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comFilippoBattainiResearchAssociate
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