Online shopping has widened retail options for millions of people, from ordering an obscure title unavailable at the local bookstore to having groceries delivered to the doorstep. E-commerce is convenient, but is it green?
Turns out the question is not an easy one to answer. For one, what do you measure and what do you compare it against? Do you compare the carbon footprint of driving a car to and from a Costco or Walmart to do your grocery run, versus the footprint of a doorstep delivery? Do you count the manufacturing process as well or just the journey from factory-gate to consumer? How about savings in emissions and not just actual emissions?
To highlight the ways in which e-commerce is moving toward a greener future – and to champion those forward-thinking companies making it happen – here at Pinduoduo we’ll be publishing a series of articles taking a closer look at four key areas of innovation.
We’ll be looking at:
- How can fast fashion tackle its returns addiction?
- What do green deliveries really look like?
- Could zero packaging meal kits be the greenest way to shop for groceries?
- The rise of the refillable: the e-commerce platforms ditching packaging
Like other sectors of the economy, e-commerce has its own sets of challenges when it comes to sustainability.
A 2019 whitepaper commissioned by a large US mall owner (vested interest notwithstanding) found that e-commerce generates five times more returned products when compared with shopping in person. A separate study by Coresight Research said clothing is the most returned category at 46.5%, or almost one in every two items.
Without a changing room to try on different sizes and styles, many shoppers resort to “bracketing” – where they over-order multiple sizes, styles and colours, fully planning to return the majority of the orders. In total, the National Retail Federation said consumers in the U.S. returned an estimated $428 billion in merchandise in 2020.
The U.S. mall owner-commissioned paper also found that online shopping uses a lot more packaging than bricks-and-mortar retail. A separate study by a non-profit advocating for the reduction and recycling of packaging waste stated that in Ireland, packaging waste generated by e-commerce increased by 25% since 2019, the equivalent weight of 15 million standard sized parcels.
While one might question the methodology or statistics cited in various studies, one thing seems clear: the growing popularity of e-commerce means that its impact on the environment will grow in tandem.
The growing awareness around sustainability is pushing leading major e-commerce operators to step up their efforts on the environment. From investing in greener packaging solutions, to experimenting with novel carbon-free ways to deliver goods, to committing to ambitious zero carbon targets across their operations, innovations targeted at greener e-commerce offer are firmly on the radar.
Companies are also developing systems for forecasting demand and route planning, employing sophisticated algorithms that analyse everything from the weather to road traffic, warehousing capacity, and repeat consumer behaviour to map out optimized routes from factory gate to customer doorstep.
Pinduoduo, China’s largest agriculture platform, has developed a smart logistics system designed to minimize food loss in transit. Global food loss and waste generate about 8% of total greenhouse emissions. It is working with manufacturers to develop sustainable packaging that eliminates waste and ensures products arrive in good shape.
In terms of minimizing merchandise returns, China’s e-commerce platforms are leading the way in using livestreaming to enable shoppers to make more informed purchase decisions. For instance, merchants selling apparel model the clothes on a livestream session and answer questions posed by viewers on sizing and material.
E-commerce platforms are also working with manufacturers to develop tailored products based on insights into consumer preferences, such as Pinduoduo under its Consumer-to-Manufacturer (C2M) initiative.