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E-Commerce in a Green World

 

Author: Bernard Scheffens

In Today’s world, with COVID-19 raging through the world, the digital demand for goods and services has exploded. No surprises. E-Commerce was already growing strong, with digital ordering, delivery at home, easy does it!

However, in beginning of 2018, the Government in China already foresaw a couple of issues here: what to do with the packaging waste? How to produce more sustainable packaging products to reduce waste, prevent using natural resources as trees, as you need them for producing paper->carbon board etc.

The problem is huge. In 2018 over 130 million packages are distributed on a daily basis in China, of which roughly 50% is carbon board. It has risen significantly since… and numbers in Hong Kong have grown as well.

Initiatives to tackle this has been undertaken. Companies signed up for an effort to do something, Government at State and Provincial level were involved. Simultaneously, using ‘circular economy ready’ packaging was woven into the effort, although not much available yet to implement.

See: design by Dröge & Van Drimmelen/Dr2, Netherlands/Shanghai, 2018

The slide demonstrates the items involved to organize a process to the benefit of all players: governments, e-commerce companies, package-manufacturers, transport companies etc. It shows that things can be done.

Each of the parties have their own interest. The Government wants to have an overview how this will result in less waste, less or no use of natural resources. E-Commerce companies are interested to find ways to reduce their cost. Package manufacturers are keen to understand to stay in business as number of packages to be used will be reduced, but the price of a package will go up. Transport companies will be tasked to return the package, how will that be done?

Role of Government: this requires a level playing field that only Government can provide, by law, regulations, enforcement and to impose this to all players in this branch. It will prevent that companies will only be interested in their own role, with a risk that several different systems will be established, creating an indispensable industry. At the same time, they can be provided data to monitor the process.

E-Commerce companies of course want a competitive advantage if they can use cheaper way of packaging. Just a theoretical example: Suppose a standard carbon board package will cost 10 HKD. A more sustainable package may cost 100 HKD. But if it can be used 20 times, the package would cost only 5 HKD. These efforts need a closer look of course, to build a sustainable business case with all cost involved. But early signs tell us, it is worth the effort and can be done.

The transport companies need a solution where to return the package. Once the owner of the package can be identified (data management), the package can be returned and re-used by those who invested in the package.

Want to know more about the happenings of circular economy? How to integrate your business with the circular economy? Please do not hesitate to contact us! Our email address is: shanghai@dr2consultants.eu!