The application of blockchain technology really shines when it can be applied in highly centralized industries that have had no choice but to build in one or more “middle-man” layers to assist getting products and services to consumers. Overall, these middle layers add an enormous cost to the consumer as each layer needs to take in a profit. This also creates weaknesses in the system such as:
- Domination of retailers and retailer abuse of power
- Supply chain inefficiencies
- Outdated/costly/ineffective trade promotions
However, with blockchain (and advent of smart contracts), these layers become unnecessary as products and services can move directly from manufacturer/service provider to consumer.
An industry riddled with middle-man layers is nowhere more apparent than in the global grocery market where major inefficiencies and abuses in power are easily identified.
The global grocery market is expected to grow 6.1% annually and to reach $8.5 trillion by 2020. Everyone needs food, so groceries represent a significant share of consumers wallets, where in the United States the share spent is 7 percent all the way up to Pakistan where the share is approximately 48 percent (source)
This is where INS Ecosystem Limited (INS) wants to disrupt old institutions by targeting a rapidly growing segment of the grocery market: the online grocery industry.
Several demand and supply drivers in the online grocery segment will make it possible for INS reduce prices and receive direct rewards from manufacturers, thus accelerating consumer adoption and convenience.
INS estimates that they can save consumers up to 30% on everyday shopping directly from grocery manufacturers by implementing a decentralized ecosystem.
WHY THE ONLINE GROCERY MARKET?
To fully understand why INS wants to target the online market you have to understand what is driving industry growth. Then you will be able to see where it is and where it is going.
In 2015 the global online grocery industry was approximately a $98 billion industry. It is expected to grow to a 290 billion industry by 2020 (source).
Several factors are driving this growth. Here are factors to consider:
| On-demand economy expectations | Advent of mobile technology |
| Time-starved lifestyle in large cities | Automated fulfillment solutions |
| Worsening traffic conditions | New marketplace models that require less capital expenditure |
| Growing smartphone usage | Crowdsourcing economy driving affordable, quick delivery |
| Growing middle class in large urban areas |
In an industry where prices, product quality and convenience are the most important purchasing factors, one can see why INS feels it can make a positive (and profitable) impact.
THE INS ECOSYSTEM AND PLATFORM
INS will create and ecosystem with 4 main participants:
Platform – The INS platform will be a decentralized marketplace where manufacturers perform a variety of tasks (publish products, marketing campaigns, receive feedback) directly for the consumer to digest.
Consumers – Consumers interaction is vital as they will receive promotions, rewards, and send feedback. Overall, they will have tools to make better purchasing decisions.
Manufacturers – While its main role will be to publish products, manufacturers will need to study feedback, manage promotions and loyalty programs and ensure fulfillment centers have the necessary inventory for consumer orders.
Fulfillment Center Workers – Just as important player, fulfillment center workers are responsible to take in manufacturer products, assemble them into consumer orders and pass the orders to delivery couriers.
ICO DISTRIBUTION DETAILS
INITIAL CIRCULATION: Will depend on the amount of contributed funds
TOTAL CIRCULATION: 100,000,000
ACCEPTED CURRENCY: BTC, ETH, LTC, DASH, USD (Bank Transfer)
EXCHANGE RATE: 1 ETH = 300 INS TOKENS
MIN ACCEPTED: 0.1 ETH
ICO SCHEDULE AND BONUSES (Duration/Bonus below 10 ETH/Bonus 10-100 ETH/Bonus Above 100 ETH)
Day 1/20%/22.5%/25%
Days 2-8/15%/17.5%/20%
Week 2/5%/7.5%/10%
Weeks 3-4/0%/0%/0%
The token distribution is proportional to the number of INS tokens generated (see initial circulation above)
| ICO PARTICIPANTS | 60% |
| INS TEAM | 15% |
| ADVISORS, EARLY SUPPORTERS, BOUNTY | 5% |
| RESERVE FUND | 20% |
ROADMAP AND GEOGRAPHICAL EXPANSION PLAN
| Q4 2017 | ICO |
| Q1 2018 | INS Platform Development |
| Q2 2018 | Development of the INS consumer & fulfillment apps and interfaces |
| Q3 2018 | Development of the supplier SDK |
| Q4 2018 | INS Launch! |
| 2019 & Beyond | Geographical expansion and growing the ecosystem (see list below) |
GEOGRAPHICAL EXPANSION PLAN
INS will consider expanding into cities based on population size, income level and grocery market concentration ratio. The following cities meet that criteria today:
- Los Angeles
- New York
- London
- Paris
- Seoul
- Hong Kong
- Tokyo
- Singapore
FINAL THOUGHTS
At first, I wondered why INS choose the online grocery segment, however its apparent that it is growing at a faster pace than the main brick and mortar segment and guaranteed to grow further as more countries develop and populate urban and suburban areas. Honestly, who wouldn’t want to save money and time on grocery shopping by outsourcing it to a delivery service? I use a home service when my wife or were unable to make it to the store and I personally know several families that use or have used a grocery delivery service as well. These are centralized services! I can only imagine how much more efficient a decentralized service like INS's ecosystem platform will improve my overall experience and reduce my cost!
In addition to positive overall market conditions and growth, INS have other factors that will improve their chances at building a successful ecosystem and platform. INS has over 4 years’ experience building manufacturer and consumer relationships within the grocery industry. In other words, they understand it’s inefficiencies and outdated practices because have first-hand experience with running the largest venture-backed grocery delivery operator in Russia: Instamart.
INS has also stated that they have already received strong interest from several big grocery manufacturers. According to INS, they signed non-binding memoranda of understanding with the following companies:
- Unilever Food Solutions
- Unilever
- Reckitt Benkiser
- Friesland Campina
- Valio
- MARS
INS has an impressive resume of experience as well as confirmed interest from some of the largest grocery manufacturers in the world.
I encourage readers to read the INS Whitepaper (see REFERENCE LINKS) as I’ve only scratched the surface by highlighting key details. For instance, the whitepaper has descriptions for key components and processes on their platform such as rewards, cross-marketing, rating score, dispute resolution, and personal data security.
I also like it that they admitted that overall adoption will be a challenge. INS knows that customers likely have little-to-no knowledge of blockchain-based technologies or tokens. INS promises to make the customer experience very simple and straightforward for consumers to buy, earn and use INS tokens. The complexities of opening and maintaining a cryptocurrency wallet will be made seamless in their INS website and apps.
In sum, INS clearly has the prerequisites to be successful in the online grocery segment. I will enjoy watching their business mature and hope it will be strong enough one day to take their experiences and apply them in a way to threaten the overall global grocery market.
REFERENCE LINKS
INS Website
ICO Details
Whitepaper
FAQ
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