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​Alibaba pilots blockchain supply chain initiative down under

Blackmores and Fonterra have joined the pilot that will see products shipped to China from Australia and New Zealand in first trial of Alibaba's blockchain-based Food Trust Framework.

Alibaba Australia has announced the launch of a pilot that will see orders made through the company's new Food Trust Framework, an initiative that uses blockchain technology, in attempt to improve supply chain traceability.

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Health supplements company Blackmores and dairy products supplier Fonterra will be the first to trial the Food Trust Framework, shipping products from Australia and New Zealand to China via Alibaba's Tmall Global platform.

Alibaba is hopeful that if the pilot taking place in Auckland is successful, the blockchain framework could form the basis of a global supply chain model applied across all of Alibaba Group's ecommerce markets.

The company believes blockchain, best known as the technology behind cryptocurrencies such as bitcoin, is well-suited to address food fraud -- a practice that involves packing foods with lower-quality and often counterfeit ingredients.

The trial follows the Chinese giant in March last year joining forces with Australia Post and PwC to explore the use of blockchain technology to combat food fraud.

The local arm of the Chinese giant also signed a memorandum of understanding last year with Blackmores, Australia Post, Fonterra, and New Zealand Post for the framework.

The framework, according to Alibaba, aims to achieve end-to-end supply chain traceability and transparency, boosting consumer confidence and building a "trusted" environment for cross-border trade across Alibaba's Tmall Global platform.

In addition to blockchain technology, products will also be tagged with QR codes.

"These technologies are designed to authenticate, verify, record, and provide ongoing reporting of the transfer of ownership and provision of products and goods," Alibaba said in a statement.

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According to Alibaba, food fraud costs the global food industry an estimated $40 billion each year; PwC has also estimated that 40 percent of food companies find food fraud difficult to detect with current methods, and 39 percent think their products are easy to counterfeit.

The company also said the framework represents the next step in Alibaba's vision to build the future infrastructure of commerce.

"Food fraud is a significant global challenge, particularly with the growing complexity of supply chains," Alibaba Group general manager of Tmall Import & Export Alvin Liu added.

"In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both end consumers and merchants."

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