Alexander Busarov is best known as the CEO and co-founder of WaBi and Walimai. WaBi is a “consumer incentivization token, rewarding consumers for purchases, scans, and other user-related actions”, and Walimai is a company dedicated to solving the problem of counterfeit goods in China.
Alexander was kind enough to spare some time to have a chat about WaBi and blockchain in general and shared with us some insights into blockchain’s capability to disrupt the supply chain industry.
Alexander Busarov will be joining us at Blocfest, presenting the topic: “Farm To Table 2.0? Supply Chain, Blockchain and a New Age in Consumer Confidence”.
Sean: How did your journey into blockchain begin?
Alexander Busarov: Well we actually started with a company called Walimai and we always considered blockchain as something that could help us in terms of supply chain. When we changed the model to being more of a retailer, we also realised that there’s a lot of benefits to having our loyalty programme based on blockchain technology, and this is how WaBi was born.
Sean: What is it about the loyalty programme model that works so harmoniously with blockchain?
Alexander Busarov: There are a few things. One is being able to give power to the people. It’s really about improving the value to the end users of the system. I’m sure most of us hate certain caveats that other loyalty systems often impose on its users. For example, you can rack up air miles, but the rewards will only be redeemable under certain conditions. What we realized is that when you put it on the blockchain, the points themselves start to have value, so instead of being a liability to the company, it becomes an asset to the person. So that’s the first point.
The second value proposition is really for the company itself. Like I said, instead of being a liability to the company that has to be in the balance sheet which creates all sorts of accounting limitations for the company, it is now an asset of the person and the person outright owns it, and I think that’s actually much better for the company itself.
And the third point that I’d like to make, is the potential for growth. If you have a standard loyalty system that isn’t powered by blockchain, it then becomes very hard to integrate with other players. So, what happens is that you see all companies with own loyalty programmer and with consumers hating the fact that they have to carry hundreds of loyalty points cards with them. It’s difficult to integrate in that case because you need to negotiate all sorts of value transfers between the companies. You need to renegotiate all those limitations with every new participating company that joins. But when a loyalty system is powered by blockchain with external value, it’s a simple exchange of one form of value to another form of value and you can have everyone joining in and agreeing on this exchange unanimously.
Sean: Let’s talk a bit about the WaBi token. What’s its utility in simple terms for those who may not be so clued up about how tokenised economies work? And how does it incentivise investors?
Alexander Busarov: We often get mistakenly placed into the supply chain bucket. Now in the supply chain bucket, the way that tokens often work is that there is a token that enables the operation of the blockchain, and we’re not that. In fact, early on we decided that it should not be a token that fluctuates in value that enables the operation of the blockchain. While it might work in some situations, we believe that in real-world applications, it’s just a nightmare for the corporates.
Let me describe what Wabi is on an example. Let’s say you have a producer of coffee who wants to promote coffee in a retail chain. The traditional way of doing it would be to give some sort of a discount or special offer. This technique is now quite outdated. Today, we can use data-driven solutions that revolve around loyalty programmes. With our system, this coffee producer would need to buy WaBi tokens, and then use them to give to the consumers. This is the ultimate usability. It unlocks the value hidden in all retail discounts and offers and moves retail marketing to a whole new level.
The consumers can then of course come back to our own channel and redeem those for things that they want, or they can use those points to redeem things on our partner networks, such as the HiNouNou tokens.
Apart from using Wabi token as a unit of value in marketing to consumers, we also ask manufacturers and suppliers to pay using Wabi for advanced analytics and marketing data”
Sean: In a recent interview you mentioned that another utility of the token is that by actually scanning the goods, you are also effectively increasing the security of the network? Could you explain a bit more about that?
Alexander Busarov: Yes, this is more of a particular thing in our network that we’ve enabled and it’s very important. The way that the security of our technology works, is that every scan of the product will update the data of the product and also information on the blockchain. It’s a bit like how in a banking log in device, you have the rolling codes where the codes are always changing with every login.
Of course, we want to encourage the changing of those codes and reward the consumers to scan and make the system more secure. On our end, not only do we want to sell the product, but we’re also constantly trying to improve the system and we use WaBis to do that.
Sean: Let’s talk about the WaBi label technology. Was it a matter of you reinventing the wheel here or, was it modelled after an existing piece of technology?
Alexander Busarov: It’s modelled on the existing principles and also the technological components. We use standard components. For example, for the chips, we use NXP-produced chips and NXP is a Dutch-based company that produces good quality chips.
Sean: And the label data is transmitted to the blockchain?
Alexander Busarov: Yes, with every scan that happens, data such as who is scanning and where the item was scanned from is effectively logged, and the data is stored on the supply chain blockchain.
Sean: Why do you think that blockchain is poised to become such a powerful technology to disrupt how supply chain management currently operates? And I guess also on the tail of that, what is your ideal vision of supply chain management in say 5–10 years?
Alexander Busarov: I’m not sure if it will become seamless per-se, as there are still things to manage. You still need to scan, log the events, and they can happen in more automated ways. I think the blockchain supply chain enables more trust. Instead of companies keeping their own databases and entrusting that the integrity of the data is not compromised, this blockchain supply chain allows companies to prove that the correct records of items are kept.
But more importantly, blockchain allows for data to be more structured and presented in a trusted manner. So, let’s say if we’re talking to a shipping company, and they have their own database, they can publish their APIs to have some access to their data. So, a blockchain supply chain enables transparency for all parties involved.
Sean: In your opinion, what’s the biggest challenge that the blockchain industry needs to overcome, as a whole and also within your niche?
Alexander Busarov: Right now, I think the big challenge for blockchain is adoption. We’re seeing real use cases of payments and transfers, with investments and trading with ICOs and whatnot. I do believe that this will still be fairly niche, especially with traders.
As there are more people with loyalty points, they will start to use blockchain technology without even realising its blockchain as it’s all happening behind the scenes. The consumers will be greeted by the same interface in their apps and continue to rack and redeem loyalty points that are powered by blockchain. With loyalty points, I believe that the consumers will play a big role in refining the technology.
Sean: We’re really excited to have you speak at Blocfest! Are you looking forward to it?
Alexander Busarov: I’m very excited about meeting more people in a region that we’re interested in! It is a region of interest for us in terms of the supply chain authentication side and also the WaBi loyalty points side.
Find out more about WaBi here.
Find out more about Walimai here.
Connect with WaBi/Walimai on Twitter here.
Alexander Busarov will be joining us at Blocfest, speaking on the topic: “ Farm To Table 2.0? Supply Chain, Blockchain and a New Age in Consumer Confidence”. Hear from him and many other thought-leaders as we deep-dive into all things blockchain this September 25–27.
With a raft of respected blockchain thought-leaders from Malaysia and around the world set to feature, Blocfest’s focus will be on blockchain’s immense potential in the Southeast Asian region, where the technology has already made great headway.
Blocfest is set to launch 26–27 September, and guests are invited to also join us for KL Blockchain Week.
Find out more about our speakers by clicking here.
Sean’s unequivocal passion for all things blockchain blossomed in late 2016. Starting off his journey as a daytrader, he found himself quickly immersed in the projects and their visions of a decentralised future economy. He is Blocfest’s chief writer/editor, and publisher of Channel 3.0, a blog focusing on blockchain-powered digital media, content and advertising platforms.