Qoo10 launches blockchain-powered marketplace with cryptocurrency

Ecommerce firm Qoo10 has unveiled a new blockchain-based ecommerce marketplace and a new cryptocurrency to go with it. Named QuuBe (pronounced “cube”), the platform closely resembles Qoo10’s flagship marketplace and is available on desktop and mobile. Currently on beta, the marketplace will fully launch on January 1, 2019.

The unique selling point of QuuBe is its use of smart contracts, a blockchain feature that automates the verification of transactions between different parties – in this case, merchants and shoppers.

QuuBe’s blockchain network was built on the Ethereum protocol by an in-house team of 20 developers based in South Korea. The platform employs 20 more staff in Singapore to handle sales, marketing, and operations. QuuBe is enabled through the use of Q*coin, a private blockchain token created by Qoo10 for the marketplace. Purchases on QuuBe can only be made via this token.

According to Qoo10 CEO Ku Young Bae, QuuBe can better serve customers with more competitive prices, thanks to a new revenue model. By removing the 10 percent merchant fee and payment gateway fees that traditional marketplaces charge, merchants can compete with other ecommerce platforms.

QuuBe will instead offer advertising spaces for merchants to bid for on its website and app.

Headquartered in Singapore, Qoo10 has 6 million daily active users in countries including Indonesia, Malaysia, China, and Hong Kong. The company has set its sights on Southeast Asia, but its blockchain goals aren’t just about embracing the technology. Ku also hopes the platform will serve unbanked markets such as Indonesia and Myanmar.

“You usually [put your] money in the bank; you wouldn’t put money into a private company’s [mobile wallet],” observess Ku. “The company could go bankrupt, they could just change the data, or [money] can be stolen. Unless trust is built, you can’t be very sure that top-ups into the wallet can be the same. Those hurdles are sorted out by blockchain because the blockchain wallet is not something that we can change and access. Only you can access it.”

This element of decentralized regulation, according to Ku, could go a long way in enabling unbanked communities. With Q*coins available for purchase in 7-Eleven convenience stores, vendors could start their own businesses and buy goods even without access to a financial institution.

The promise of blockchain

Qoo10 aims for US$1 billion in gross merchandising volume by 2020 – a lofty goal, considering blockchain adoption is still in its nascent stages. Many firms are struggling to adopt the technology, while only 0.71 percent of the world’s population are using cryptocurrencies.

But experts think that the idea of a decentralized ecommerce marketplace exemplifies the promise of blockchain.

“It is easy to imagine why such an alliance (between blockchain and ecommerce) might occur, with the removal of gatekeepers between buyer and seller, merchants, consumers, and manufacturers stand to benefit from more cost-efficient transactions,” says Xinshu Dong, CEO of blockchain platform Zilliqa. “As ecommerce moves to the blockchain, the redistribution of power – no longer the sole property of retail giants – will allow more collaborative, creative, and competitive ways of business. Smart contracts will also improve friction points throughout supply chains as transactions undergo a methodological process of verification and execution.”

Despite the struggles of adoption, Qoo10 isn’t alone in its quest. US startup OpenBazaar has raised a total of US$4.2 million with investors Andreessen Horowitz and Blue Yard Capital to launch their decentralized marketplace. Vietnam-based startup Tipo also released a whitepaper in September 2018 for their business-to-peer-to-peer (B2P2P) marketplace.

Stable and steady wins the race

Cryptocurrencies like Ethereum and Bitcoin have also acted as the poster tokens for volatility, making them unsuitable for transactional use. To avoid subjecting customers to that kind of unpredictability, Qoo10 uses the US dollar as the point of reference for its token’s value. Initially sold at US$1, Q*coins are subject to revisions at every million tokens sold to allow for appreciation.

This is very similar to stablecoins or cryptocurrencies that hold stable values, which have been steadily increasing in popularity. In December 2017, stablecoin Tether was briefly one of the top four cryptocurrencies in the world. New York-based Paxos also launched a token pegged to the US dollar.

But unlike Tether and Paxos, Q*coins will be held on a private blockchain, which means that the onus is on Qoo10 to manually adjust the token values.

The art of adoption