Dubai-based retailer Landmark Group and banking giant HSBC have completed a first-of-its-kind transaction that connected two independently-built blockchain platforms, marking a major step forward in the Middle East’s logistics and retail industries adopting blockchain.
The transaction involved a shipment from Bee Dee Industries in Hong Kong to Babyshop, Landmark Group’s family retail brand in the UAE, a statement said.
It added that a letter of credit was issued by HSBC using the Voltron platform and Landmark Group’s initiated ReChainME platform enabled connectivity with its logistics partners at both ends of a key trading corridor.
This meant that all the key participants along the logistical supply chain could view documents and track progress of the shipment in real-time, thereby reducing the overall time to complete the transaction by up to 12 days, a 40 percent reduction.
It also helped reduce the need for paper, as retail supply chains typically involve large numbers of paper documents that are screened and updated at multiple touch-points.
Rajesh Garg, group chief financial officer, Landmark Group, said: “We saw the promise of blockchain technology and embarked on the journey. This is a huge milestone for us at Landmark Group. Embracing new and emerging technologies like blockchain in our physical and financial supply chain not only aids in improving speed to market efficiency but also reflects our commitment to driving transformation in the retail sector and ultimately creating value for our customers.”
Sunil Veetil, regional head of trade at HSBC Middle East, North Africa and Turkey, added: “Being able to connect two complementary blockchain platforms is a significant milestone in the development of this technology.
“In a world where businesses are increasingly positioning their supply chains across several markets, blockchain platforms will undoubtedly give them a competitive advantage by increasing the velocity of trade without compromising on privacy and security,” he added.
Voltron is a distributed ledger trade finance platform which digitises the letter of credit process from application through to document presentation.
HSBC has previously facilitated four major transactions with this technology across its global network, but this is the first time Voltron has been connected to a complementary blockchain platform, and the first time Voltron has been used to issue a letter of credit between the UAE and Hong Kong.
A blockchain is a system in which an immutable record of transactions is maintained across several computers that are linked in a peer-to-peer network.