Hotoken Promises to Revolutionize Retail Discount Economy with Blockchain
Where Asia was once very much a consumer of the West’s culture, it has emerged in recent years as a trendsetter in its own regard. Asian markets have proven themselves more willing to adopt new technology, loyal to products that resonate with their unique brand of consumerism, and open to trying new experiences. Such a combination of factors makes blockchain, a solution that rewards participants in inclusive ecosystems, a pertinent tool for services looking to unlock the Asian market.
I sat down with HoToken by HotNow founder and CEO Nithinan Boonyawattanapisut to discuss this technological revolution, and how her company will deploy it to reach Asian audiences more effectively.
Blockchain rises in the East.
Blockchain found a captive audience in the Asian market, regardless of which country in the region one chooses to focuses on. China, for instance, was one of the first countries where bitcoin was mined en masse, by using state-subsidized electricity to run mining equipment inexpensively. Chinese citizens flocked to cryptocurrencies to circumvent capital controls imposed by the People’s Bank of China, but also to drive a thriving startup economy through initial coin offerings. In Japan, bitcoin is legal tender, and Singapore has one of the most robust blockchain banking plans laid out in recent years.
As impressive as these trends are, Boonyawattanapisut says another real power of blockchain isn’t speculative, or financial in any regard. Instead, business utility—as a tool for B2C and B2B marketing—will take blockchain to new heights in this regional market. “We saw huge potential for blockchain as a B2B tool in the East,” Boonyawattanapisut says. “The $6.6 trillion in revenues generated by the Asian retail market travel almost universally through brick and mortar stores, making up over 93 percent of 2016’s total. Despite its enormity, online consumers aren’t aligned properly with offline merchants, representing a gap that the data only makes more curious.”
She illustrated that most Asian consumers actively search for brick-and-mortar deals on the internet, yet their demand for discounts goes largely unmet. Retailers find existing promotional platforms too burdensome and are unable to dedicate the amount of time necessary to optimize campaigns and make achieving a new customer worthwhile.
Incentivizing retail participation.
“With blockchain, we can help to connect some of the dots in this puzzling picture,” explains Boonyawattanapisut. The decentralizing technology is a powerful tool for those who want to create networks where all stakeholders have an equal interest in the group’s success. For retail, blockchain is likely to be a very disruptive force due to its ability to create closed ecosystems, where value isn’t lost in the cracks between stages of the marketing funnel. A key component in this equation is gamification, a concept that Boonyawattanapisut’s HotNow platform will use alongside cryptocurrency to drive better and more valuable engagement with brick and mortar businesses in Asia.
“The HoToKeN platform will help retailers drive customer interaction with their brand online by rewarding those who engage in the entertaining and contributory activities they provide. For writing reviews, playing mini-games, sending referrals, posting images from the shop on social media and other valuable contributions, customers receive HoToKeN, which they can use to get better deals on the products and services available from their favorite businesses.” Cryptocurrency provides a transparent layer to keep track of these activities, measure them, and ensure that the best brand advocates are rewarded in proportion to their efforts.
Boonyawattanapisut’s newest venture helps create a more tangible flow of value between customers and merchants, but adds a new feature that helps HotNow ensure the network is kept buzzing. Bigger spending activity for any single customer also rewards them with higher “credibility” in the system, which users can employ to borrow tokens for use in their favorite stores. With such a strategy, HotNow shows consumers that they can make a meaningful impact on their daily finances with cryptocurrency, using innovation instead of speculation.
Blockchain builds trust into HoToKeN.
To meet its ambition of altering the status quo in the retail discount economy, HotNow sees the use of blockchain as a necessity and not a novelty. Blockchain is the only solution that can provide HoToKeN users the level of transparency required to trust the key metrics reported by the company to participants of its ecosystem. Currently, centralized marketing performance suites like Google Analytics exercise explicit control over the data gathered on users’ websites, and these users have no choice but to believe the accuracy of Google’s insights despite some key flaws in how they’re reported.
The crux of the issue is that the interests of Google and its users are not aligned properly, because Google earns money from clicks regardless of their quality, while its users get no value from a fraudulent click. Google purposely emphasizes the importance of the total number of clicks accordingly, and makes deeper analysis of the ‘Why?’ and the ‘Who?’ behind these clicks difficult to determine.
Retail businesses using HoToKeN to set up discounts for their stores have a much more transparent and granular look at those interacting within their ecosystem, thanks to the blockchain’s ledger. They can get detailed demographic and numerical information on those who saw the promotion, clipped the coupon, and how they used it. With such trustworthy data practices, a business can make better insights and more impactful changes to their promotions, allowing them to optimize their efforts and earn more.
Gamification against deflation.
“HotNow didn’t adopt cryptocurrency haphazardly. We saw questionable ICO trends turning market sentiment against the young market, and only after intense deliberation decided to tie our solution to blockchain. We will show the market that cryptocurrency can be used for productive means, instead of derivative ones,” according to Boonyawattanapisut.
This modus operandi is apparent in the robust value proposition of HoToKeN. Where other cryptocurrencies exist purely as speculative tools based on their deflationary nature and scarcity, HoToKeN’s purpose is to get people to spend it—not hold it. This idea will be crucial in a more mature blockchain environment, which could be coming soon as the massive upswing of late 2017 dies down. Solid use cases will be the bare minimum a service needs to offer to drive user engagement with its coins.
Services like HoToKeN will help to diffuse such a precarious market, and show skeptical governments and central banks that cryptocurrency has an unthreatening, industrious purpose. I was very impressed after my brief talk with their CEO and Founder and look forward to following the company as it works towards its goal of being present throughout the entire Asian region by 2020.