The hidden environmental cost of online shopping in China

Business & Technology
Sponsored by Xi'an Jiaotong-Liverpool University

Internet shopping has revolutionized the Chinese economy, but young consumers want sustainability.

taobao double 11
Staff of e-commerce companies work overnight to pack goods for delivery during Singles Day, a shopping holiday founded by Alibaba and popular among young Chinese people, in Jinhuai village, a Taobao village in Xihu town, Yangzhou city, east China’s Jiangsu Province, 11 November 2019. Reuters / Si Xinli.

This article is brought to you by Xi’an Jiaotong-Liverpool University, a leading international joint venture university based in Suzhou, Jiangsu, China.

This past year, as physical stores across China shuttered for months due to the COVID-19 pandemic, online shopping saw a massive surge. However, the boom of the digital economy has led to growing worries about its environmental consequences.

With ecommerce taking up more than 35% of China’s retail sales — the highest percentage in the world — even before the pandemic hit, the months-long lockdown has driven older generations and new customers to establish new online shopping habits, which are likely to persist in a post-pandemic world, according to a McKinsey report on consumer behavior and the landscape of retail. 

While the growth in online sales is a boon for China’s economy, a report by Greenpeace and other environmental organizations has said that without more environmentally friendly policies, the accumulated waste from China’s ecommerce and express delivery sectors is projected to more than quadruple by 2025.

“The pressing issue at the moment is how to prevent plastic packaging materials from entering landfills and incinerators,” says Dr. Shih-Yang Kao, an assistant professor in the department of urban planning and design at Xi’an Jiaotong-Liverpool University (XJTLU). “In addition, the popularity of express shipping options such as next-day delivery has the potential for increasing carbon emissions.”

More and more Chinese companies are ramping up their eco-friendly efforts

In recent years, a growing cohort of Chinese companies, big and small, have ramped up their eco-conscious efforts to fight climate change. For instance, LUÜNA naturals, a period care startup based in Shanghai, has been a pioneer in popularizing the idea of “green menstruation” among Chinese consumers. By selling organic menstrual hygiene products made of toxin-free materials, the manufacturer strives constantly to reduce its environmental footprint, according to a mission statement on its website

“I was horrified when I found out that the tampons I’ve been using for many years were made of a combination of conventional cotton, which is grown with hazardous pesticides and fertilizers,” says Olivia Cotes-James, founder and CEO of LUÜNA naturals. “It was through my LUÜNA experience and learning about the industry that I really had my eyes open to the menstrual products’ impact on the environment.”

As LUÜNA enters its second year with the launch of its first plastic-free applicator tampon, Cotes-James adds that she’s curious to see how the brand’s customers will “advocate for a more sustainable lifestyle” and “how many people in their friendship circles will be more open to the idea based on the endorsement of acquaintances they trust.”

In a more straightforward approach, Emmanuel Dean and Miguel Z. Boy, two young entrepreneurs from Singapore, made their foray into the world of sustainability by establishing Boomi, a Shanghai-based zero-waste ecommerce platform that sells starter kits filled with eco-friendly products. In 2019, the duo also launched a Forest Initiative, in which they are committed to donating 8.8% of their sales and events to planting trees in Inner Mongolia through their partnership with Shanghai Roots & Shoots.

For their part, some Chinese tech giants have also incorporated sustainability into their initiatives. For example, Alibaba Group, the world’s biggest ecommerce company by sales volume, created a secondhand online marketplace named Idle Fish in 2018. Since its launch, the platform has recycled over 8,500 tons of unwanted clothes while running a rewards program designed to help promote recycling efforts among its 200 million users. Chinese retailer, on the other hand, has undertaken a variety of environment-focused initiatives, such as promoting digital invoices and employing electric vehicles for delivery. 

Meanwhile, Cainiao Network, the logistics unit of Alibaba, has been expanding its eco-friendly initiatives by adopting eco-friendly packaging and operating an incentive program to encourage its customers to recycle.

But, like many other companies around the world, the Chinese ecommerce industry could do more to reduce the carbon emissions that warm the planet, says Dr. Ellen E. Touchstone, associate dean for responsible and sustainable business education at International Business School Suzhou (IBSS) at XJTLU. 

Ways to end inaction

Given that time is running out to stop irreversible climate change — scientists say “human-caused” carbon dioxide emissions must be cut in half by 2030 to stave off the worst impacts of warming — Touchstone urges Chinese companies to start engaging in greenhouse gas accounting and set specific, measurable reduction goals.

“I would go a step further and advise Chinese companies to go beyond environmental sustainability to consider their impact on stakeholders other than the planet,” she adds. “They really need to become more purpose-driven organizations who look at their societal consequences.”

But Kao points out that because corporations are largely profit-driven, and investing on climate change solutions can be against their financial interests at times, government regulations are needed to hold companies to their climate commitments. 

While acknowledging that in the past decade, the Chinese government has made wide-ranging efforts to “promote recycling among consumers and neighborhood residents” in the past decade, Kao notes that it’s imperative to introduce specific regulations about how sellers and logistic firms should optimize their supply chains and packaging. “What China has at the moment is a draft standard for packaging. Designed to restrict courier firms to a list of approved recyclable material once passed, the guideline remains to be finalized,” Kao says. 

Just because the government and corporations are expected to step up doesn’t mean consumers can step down, Touchstone warns. She argues that everyone has a responsibility to limit global warming, even if each individual action is insufficient in itself to make a difference.

Fortunately, there has been an increased interest in sustainability among Chinese shoppers, particularly among millennials and Gen Z consumers. According to a recent study by SynTao, a Chinese marketing research firm, 80% of Chinese consumers practice sustainability in their daily lives, while over 50% of the people surveyed felt that sustainability is “an embodiment of their personal life philosophy.”

Touchstone says that while the results give her “tremendous hope for the future,” she’d like to see the heightened awareness lead to serious action by individuals on the environmental front. 

“I would suggest that consumers educate themselves on sustainable development goals and then conduct a self-audit of how they can individually and collectively affect change. There are great NGOs in China such as Green Light Year and Zero Waste Shanghai that provide excellent training on how one can change habits to become more sustainable,” Touchstone says. “It is never too young to start practicing these sustainable habits.”