CBEC for Development

Ecommerce has become ubiquitous in many countries, including China where I live as an expat. As someone with language barriers, online shopping is very convenient – I can easily buy almost anything without navigating complicated terminology or measurements. I simply search on Taobao (China’s giant ecommerce platform that’s bigger than Amazon in some ways), find hundreds of listings with unbelievable price ranges, do a bit of research using translation software, and hit buy. My item arrives at my doorstep in 2-3 days. Sounds great so far, right?

Well, the other day when I received a delivery of some eggs I had ordered on Taobao, I was amazed by the packaging – since eggs are delicate, the seller used sophisticated packaging with lots of cushioning. There were layers upon layers of material. I instantly thought about the waste I had generated – wouldn’t it have been better for the planet if I had just gone to my local shop and bought eggs off the shelf?

However, let’s analyze this logically. These eggs came directly from a seller in a remote Hubei village. If he had been supplying an offline store instead, the eggs would likely have been transported to a distribution center, then loaded onto another truck to the retail store. Even more packaging would be required to protect the eggs through this longer supply chain.

Looking at it with an economis’t perspective (which I am), the rise of ecommerce is largely driven by dramatically reduced search costs for consumers. While excessive product choices online can cause information overload, the ability to easily filter, compare and research products is tremendously beneficial. Ecommerce also enables consumers to find the exact price match for their budget. Add in increasingly busy lifestyles and the ubiquity of smartphones with fast internet, and online shopping provides compelling advantages versus traditional retail.

However, as in the TV show Westworld, “These violent delights have violent ends.” The bounty of benefits from ecommerce are not without significant costs.

Ecommerce has made shopping addictively easy. I’ve noticed I buy more things online that I don’t really need versus making the effort to go to a mall. The convenience has bred consumerism.

Also, ecommerce sees a much higher rate of returns as you can’t see or try a product before ordering. I’ve returned many Taobao items that I didn’t like or didn’t fit well once delivered. This back-and-forth generates additional transport emissions.

With fierce competition, ecommerce platforms are trying to shorten delivery times. This pressure could lead to half-full trucks making multiple trips – wasting fuel and generating unnecessary emissions.

On the flip side, ecommerce has created millions of jobs for sellers, delivery partners and logistics companies. In addition, as discussed before, it brings immense convenience for consumers. However, the current model focuses heavily on sales growth and speedy shipping without enough attention to sustainability.

What we need is responsible ecommerce – optimizing deliveries, using eco-friendly packaging, nudging mindful consumption and enabling recycling. With the right vision, ecommerce can keep providing value while dramatically reducing its massive carbon footprint. The world needs to wake up to sustainable models before it’s too late.

Acknowledgement

The genesis of several ideas presented in this work germinated through thought-provoking discussions with Professor Zhou Deyi. Our wide-ranging conversations – whether over dinner, on road trips, in classrooms, or atop the majestic Karakoram peaks – have profoundly shaped my perspectives. This acknowledgement is a small tribute to his immense influence on my intellectual journey. For more on this, please see proceedings of The 5th CBEC Forum.