Alibaba has launched its first trial of Alibaba’s Food Trust Framework; in the hopes blockchain technology will be able to reduce the amount of fake food and wine that’s appearing on the Chinese e-commerce platform.
Blackmores – an Australian vitamins group – and Fonterra – a dairy company based in New Zealand – are the first companies to trial Alibaba’s new blockchain technology. The trial is intended to improve supply chain traceability, and if successful, will be rolled out across Alibaba’s global e-commerce marketplace.
The trial follows the e-commerce giant’s announcement last year that Alibaba would be working with PwC in Australia, New Zealand, and China to set-up a framework that could uphold product authenticity standards, to ensure the online shopping platform is safe and trustworthy for consumers.
“Given Australia and New Zealand’s exemplary regulatory environments, along with being home to some of the world’s most successful food and beverage exporters, it was a natural decision to pilot the program here,” said Maggie Zhou, managing director of Alibaba’s Australia and New Zealand wing when plans for the trial were first announced.
According to research from Michigan State University, food fraud costs the global food industry an estimated US$40 billion each year, with PwC estimating that 40 percent of food companies struggle to identify fraud, while 39 percent of companies have products that are easy to counterfeit.
“Food fraud is a significant global challenge, particularly with the growing complexity of supply chains. In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both end consumers and merchants,” says Tmall’s General Manager of Import and Export, Alvin Liu.
The new supply chain model being trialled by Alibaba is expected to achieve end-to-end supply chain traceability and transparency, building a trusted environment for cross-border trade. A range of controls and standards are being implemented, which includes blockchain technology and product tagging through the use of unique QR codes.
As part of the trial, Blackmores is shipping Odorless Fish Oil to Chinese consumers, while Fonterra will be supplying Anchor dairy products to shoppers in Alibaba’s global Tmall platform.
“Blackmores goes to extraordinary lengths to have visibility over our supply chain and each of our products passes 30 tests and checks before it is released for sale. So we’re exploring ways to leverage the technology and data that can provide our consumers with assurance that their trust in our products is well-placed,” says Richard Henfrey, Blackmores CEO.
According to Fonterra, the New Zealand-based business already works with supply chain traceability technology, but the company’s President of Greater China, Christina Zhu believes this new tech will help Fonterra uphold best practice quality standards.
“Given the potential of emerging tech, including blockchain, we want to be at the forefront of developing food quality and safety standards across the supply chain. In China and many other markets, we know consumers want to be able to trace the products they purchase online, so we welcome being a part of creating a globally respected framework that protects the reputation of food companies and gives greater value and consumer confidence,” she says.
Australia Post is also on board with the trial, as the company’s Australian Chief Operating Officer, Bob Black believes the Food Trust Framework will help Australia’s local and international logistics network maintain standards across its global ecosystem.
“We’re continuously investing in technology and infrastructure, and building strong partnerships to guarantee our global ecosystem is world-class, to exceed customer demands,” Black says.
The CEO of New Zealand Post, David Walsh also has high hopes for the authenticated platform, as maintaining the country’s already strong reputation of “providing clean, green and safe products in China” is a top priority for the postal network.
“NZ Post is delighted our trusted, reliable and visible supply chain and network has been chosen to give confidence to Chinese consumers that they are getting authenticated and genuine Kiwi products. Consumers will be able to track their purchase from paddock to plate, with full and complete knowledge of its origin and journey with us,” Walsh says.
Talk of utilising blockchain technology to authenticate and trace food-based products being sold via Alibaba’s global Tmall network originally circulated last year when authorities noticed a proliferation of fake food being sold online. This has since expanded to include a large amount of counterfeit Penfolds wine, with Chinese authorities seizing more than 50,000 units of fraudulently advertised wine in March this year.