The Role of Blockchain in C2C E-Commerce Business Models

Introduction

E-commerce means buying and selling on the Internet, but it is not only a financial transaction between a user and an organization. E-commerce also includes non-financial transactions that customers have with a company. If the world wide web or another internet service is used at any point in the life cycle of a transaction, the transaction is called electronic or e-commerce (Bulsara & Vaghela, 2020). Since the 90s, e-commerce has been continuously evolving and has existed in various forms, such as B2B, B2C, C2C, and various business models, such as storefront, portals, auctions, and others (Gupta, 2014).

Among other trends, trust and privacy have been identified as top priorities for modern e-commerce development (Leonard & Jones, 2021). The key point is to enable customers to have transparent control of their data. For this purpose, blockchain has already been recognized as a suitable technology. Blockchain technology is used in e-commerce to ensure the security of data exchange and the immutability of data in distributed ledgers (Zheng & Lu, 2022). Distributed ledger technology enables a reliable distributed database, which is suitable for e-commerce (Kannengießer et al., 2020). Distributed ledger technology is an append-only database that operates in an untrusted environment, providing efficient and secure data exchange between individuals or organizations. Several applications of distributed ledger technology have developed in various domains, some of them are supply chain management, finance, health care, and others (Kannengießer et al., 2020). Another important part of the blockchain is related to smart contracts - executable codes that have been launched to make the formation of agreements as simple as possible without the need for a third party. This type of automation offers contracting parties more secure contracts programmed to cover all possibilities without oversight by responsible authorities (Khan et al., 2021). There is also a great impact on transactions that are carried out without an intermediary with a reduced duration of the transaction itself.

All types of e-commerce are facing different problems that may be solved using blockchain. For example, eBay as one example of C2C e-commerce, has elements of a business model that negatively affect customer satisfaction. Seller usually has to wait a long time for the transaction to be finished, and a buyer has problems choosing the right quality product with adequate and timely delivery. The company is trying to ensure a safe and positive relationship with its customers and ensure customer loyalty through smooth transactions (Dubosson-Torbay et al., 2002). However, the model requires a high level of trust in the C2C platform, as well as between a buyer and a seller.

This article is focused on C2C e-commerce problems and the possibilities of solving them using blockchain technology. The main problem discussed is the lack of trust between buyers and sellers. Users of e-commerce platforms have trust problems because of scams, frauds, and the possibility of low-quality products. Both parties also have problems with long periods of transferring money (Joshi & Kumar, 2020), frequently because of specifics of the intermediary’s business model. As a possible solution, we propose a C2C business model implemented using blockchain technology. We also analyze the readiness of users to accept the proposed model and technology, with the goal to obtain preliminary insights into the factors influencing the acceptance of the proposed solution.

The rest of the paper is organized as follows. Section 2 presents a literature review, analyzing the role of blockchain in e-commerce, as well as the role of cryptocurrencies in e-commerce models. Section 3 gives a proposal for a C2C e-commerce business model based on blockchain technologies. In section 4, we present the methodology and the results of a preliminary study on the assessment of the readiness of potential users of the proposed C2C model. Finally, we give concluding remarks.