In an interview to CoinFox, Evgeny Eskin, Head of Corporate Treasury at M.Video, shared how the largest Russia’s electronic retailer successfully put blockchain to practical use.
CoinFox: How did you get familiar with the blockchain technology?
Evgeny Eskin: The technology has been around for some time now, however, there are not too many examples of its practical implementation in Russia. M.Video constantly seeks to reduce costs and improve the efficiency of business processes. We found blockchain an ideal tool to optimise factoring operations. When our partners, electronic importers and manufacturers, use factoring, we need to confirm receipt of merchandise to reduce the factors’ risks. Up until now, the whole confirmation process has been done via correspondence or phone calls, which would inevitably lead to time losses and confidentiality risks. With our pilot blockchain platform, which we are developing in partnership with Sberbank Factoring, each party creates their own database, the data being encrypted and synchronised between them automatically. The platform compares hashed delivery records, confirms authenticity and gets payments through.
CF: How expensive was the blockchain solution offered by Sberbank Factoring?
EE: Not expensive at all! And this is one of the obvious advantages of the technology: because it eliminates the need of a single unified database, we save on its building, integration and maintenance. The blockchain platform prototype was developed by Sberbank’s Centre for Technological Innovations with the help of IT experts from Sberbank Technology. M.Video was responsible for the unification of the data format.
CF: What benefits has your company got from the implementation of blockchain?
EE: Secure automated data exchange and delivery confirmation reduce financial risks for factor companies and speed up settlements with suppliers. This is of crucial importance for M.Video because financial comfort and confidence of our partners is our top priority. Blockchain has reduced the time of data confirmation and processing of factoring payments from three days to several hours.
CF: Will the Sberbank Factoring’s solution find a market in Russia? What about its scalability?
EE: At M.Video, the complete deployment of the project with Sberbank Factoring is expected by the end of the year. The solution is likely to be in demand with other players due to the financial efficiency and confidentiality it offers.
CF: Would you consider implementation of blockchain in other areas of the company’s activity?
EE: M.Video closely follows all significant innovations emerging in the market in terms of their profitability and benefits for the business. Blockchain is not an exception.