Blockchain in Supply Chain Market Size, Share, Analysis 2031

Report Description

Blockchain in Supply Chain Market Outlook 2031

The global blockchain in supply chain market size was valued at USD 593.02 Million in 2022 and is likely to reach USD 27406.03 Million by 2031, expanding at a CAGR of 53.1 % during 2023 – 2031. The market growth is attributed to the increasing international trade and growing need for supply chain transparency.

Rising cyber-attacks in a supply chain are projected to fuel the market demand in the coming years. Cybercriminals attack supply chain processes by tampering with the manufacturing processes of a company, either by software or hardware. Blockchain technology protects data from cyberattacks by storing data in an encrypted format, which makes it impossible to modify or create false evidence of data and transactions. Therefore, increasing incidence of cyber-attacks in the supply chain is propelling the market. For instance, 45% of organizations are estimated to experience supply chain attacks by 2025.

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Blockchain in supply chain allows companies to update documents in a single shared ledger, which provides complete data visibility and transparency. Blockchain helps to combat issues such as delays, compliance violations, counterfeit goods, and waste. Blockchain, coupled with IoT devices, allows importers and exporters to automate tracking of the conditions of production, transportation, and quality control. It also offers easy product recalls by providing the location and identification of the affected products in the process.

Increasing international trade is estimated to boost the demand for blockchain in the supply chain. Blockchain increases international or global trade by streamlining, securing, digitizing, and accelerating operational processes in supply chains. Blockchain builds trust between importers and exporters by facilitating the transaction without a third party. Thus, the growing international trade is enhancing the market. For instance,

• As per the report published by the United Nations Conference on Trade and Development on December 13, 2022, global trade hit a record USD 32 trillion in 2022.

The COVID-19 pandemic hampered the demand for blockchain in the supply chain. The closure of non-emergency activities and international trade, due to the implementation of lockdowns and social distancing across the globe, reduces the number of merchandise trade which significantly impedes the demand for the blockchain in the supply chain. For instance,

• According to United Nations Conference on Trade and Development, the global merchandise trade recorded a decline of 7.4% in 2020 during the COVID-19 pandemic.

Impact of Artificial Intelligence (AI) on Blockchain in Supply Chain

The integration of blockchain and artificial intelligence creates an immense opportunity in the global market. Blockchain and AI help improve transparency in the supply chain by allowing the tracing of product conditions. This prevents mediators from tampering with goods. Blockchain and artificial intelligence reduce bureaucracy and paperwork, the integration of these technologies ensures an automated process that stores all the information in a digital format. It provides a direct relationship between each stakeholder such as the logistics service provider, wholesaler, and consumer. The combination of blockchain and AI technologies advances the inventory management system, builds consumer trust faster, and reduces courier costs.

Blockchain in Supply Chain Market Dynamics

Major drivers

Increasing awareness regarding blockchain in the supply chain is projected to boost the demand for the market during the forecast period. Blockchain highly improves supply chains by enabling cost-efficiency and fast delivery of products. It improves coordination between partners, enhancing product traceability, and aiding access to financing, which encourages logistics companies to adopt blockchain. For instance, 55.3% of logistics service providers stated that they spent money on blockchain.

Growing need for supply chain transparency is expected to propel market growth in the coming years. Supply chain transparency is needed to build trust between customers, companies, and suppliers, as a transparent supply chain creates an image of a business. Blockchain technology tracks all types of transactions securely and transparently. It allows companies to trace the product history right from its origin point to where it currently sits.

Existing Restraints

Complex nature of blockchain technology is expected to restrict market growth during the forecast period. It requires plenty of knowledge and technical expertise to code a blockchain, which encourages users to lessen the adoption of blockchain in the supply chain. Moreover, the data updation in blockchain technology is slower as compared to traditional databases, as it follows chain procedures in which each new record is serialized to get inserted into a blockchain.

Emerging Opportunity

Increasing need for automating supply chain activities creates a lucrative opportunity in the market. Blockchain automates supply chain activities by tracking the quality of products as they move through the supply chain, removing defective products, enabling fast identification, reducing waste, and improving customer satisfaction. Companies are adopting blockchain technology to track, confirm, and report in real-time routes and origins that products or goods take as they move through their supply chain. For instance,

• On March 21, 2022, Unilever announced to use blockchain technology by SAP SE to increase transparency and traceability in its global palm oil supply chain.

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Scope of the Blockchain in Supply Chain Market Report

The report on the market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Component Segment Analysis

Based on component, the blockchain in supply chain market is bifurcated into platforms and services. The platforms segment held a large market share in 2022, due to its ability to streamline the supply chain processes. Blockchain platform technology is a decentralized solution for documenting, tracking, and facilitating transactions in the supply chain. Companies are developing blockchain platforms to enhance the supply chain by improving traceability and transparency. For instance,

• IBM launched IBM Food Trust, a blockchain-based platform. This platform offers participating retailers, suppliers, growers, and the food industry providers with data from across the food ecosystem to enable high traceability, transparency, and efficiency.

The services segment is estimated to witness considerable CAGR growth in coming years owing to its potential to offer high traceability, security, and transparency of data shared across a business network. Blockchain service allows businesses to utilize cloud-based solutions to create, host, and use their smart contracts, blockchain apps, and functions on the blockchain infrastructure.

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Application Segment Analysis

In terms of application, the global market is segregated into smart contracts, inventory monitoring, product traceability, payment & settlement, compliance management, and others. The product traceability segment accounted for a major market share in 2022, due to its ability to comply with several government regulations and avoid potential penalties and legal issues. Blockchain helps in product traceability by documenting production updates to a single shared ledger, which provides complete data visibility by enhancing product traceability. It also identifies and resolves problems with products, helping businesses to grow.

The payment & settlement segment is anticipated to expand at a quick pace during the assessment period, owing to increasing international trade. Blockchain helps to transfer funds across the border very quickly by reducing intermediaries in the payment process. It also certifies the authenticity of payments with a high degree of transparency. Blockchain helps in the settlement of the supply chain by tokenizing assets with cryptographically secured and self-enforcing contracts.

Type Segment Analysis

Based on type, the blockchain in supply chain market is categorized into private blockchain, public blockchain, and hybrid blockchain. The public blockchain segment dominated the market share in 2022 and is projected to continue its dominance throughout the assessment period due to its ability to offer high transparency, decentralization, and accessibility. Public blockchains are open to everyone and are decentralized networks where anyone participates and validates transactions. It verifies and records transactions by the participants and offers a high level of transparency. Public blockchains are difficult to hack as they utilize cryptography to secure data and prevent unauthorized access.

The private blockchain is expected to hold a major market share in coming years, owing to its potential to provide high security and control of sensitive information. The private blockchain works on centralization networks, which allow specific access to companies or firms, ensuring transaction and data confidentiality, resulting in the growing adoption of blockchain technology in supply chain management.

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Industry Vertical Segment Analysis

In terms of industry vertical, the global market is divided into retail, manufacturing, healthcare, oil & gas, food & beverages, and others. The retail segment held a major market share in 2022, due to the increasing urbanization, rising disposable incomes, and growing consumer demand for convenience Blockchain helps retailers combat counterfeiting by accurately identifying the proof of origin of products. Retailers use blockchain as a secure tracking system that provides visibility throughout the entire supply chain, from the extraction of raw materials to the shipment of a product to the end-consumer.

The healthcare segment is projected to expand at a quick pace during the assessment years, due to the increasing demand for wellness, improved health awareness, and high access to medical facilities. Blockchain distributed ledger technology facilitates healthcare researchers to unlock genetic code, strengthens healthcare data defenses, secures the transfer of patient medical records, and manages the medicine supply chain. Blockchain in healthcare offers the safety and quality of healthcare components such as blood plasma by providing high transparency, traceability, and security, which enhances their adoption in healthcare.

Regional Outlook

Based on region, the blockchain in supply chain market is segregated into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America accounted for a large market share in 2022, owing to advanced technology appropriation and infrastructure as well as the presence of established players such as IBM, Oracle, and others. Moreover, the increasing international trade in the region is expected to boost the demand for blockchain in the supply chain, as it offers improved security and increased traceability in supply chains. For instance,

• According to a report published by Bureau of Economic Analysis (BEA) on February 7, 2023, exports increased by USD 453.1 billion or 17.7% and imports increased by USD 556.1 billion or 16.3% in 2022 as compared to 2021.

The market in Asia Pacific is anticipated to expand at a high CAGR in the coming years, due to the increasing technological development and international trade. Increasing international trade is propelling the need for blockchain in the supply chain to facilitate secure transfers of products or goods. Moreover, the growing favorable support from governments for boosting international trade is estimated to encourage logistics and supply chain companies to adopt blockchain in their supply chain activities. For instance,

• The government of India plans to invest USD 25 billion in shipping and port infrastructure to improve the logistics sector in the country.

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