E-commerce has transformed the way we shop. It has made digital shopping more convenient and accessible. With a vast array of products available at our fingertips, services like the Blinkit app in India exemplify the seamless delivery of groceries to your doorstep within a mere 8-20 minutes. However, this rise in online and app-based shopping has brought forth a set of environmental consequences. Contending with sustainability issues in packaging to the rise in carbon emissions from shipping, the e-commerce sector has now begun to acknowledge sustainable e-commerce practices.
The sustainable transformation of the e-commerce sector began to gain momentum in the late 2010s. This is when global e-commerce brands started taking sustainable pledges and brought their strategic focus to sustainable e-commerce. As we reach the end of 2023, many e-commerce brands today acknowledge the negative carbon emissions and our current climate crises. However, it’s vital to delve into the motivations that prompted e-commerce brands to embrace sustainable practices. Let’s understand the reasons why e-commerce should explore sustainable e-commerce:
Rise in consumer awareness and demand for ethical products
Consumers today are increasingly aware of environmental and social issues. They are placing a higher value on sustainability in their purchasing decisions. Demanding more sustainable and ethical products. In response to consumers’ increasing desire for products and services that embody environmental and social responsibility, e-commerce brands are adapting to these expectations in various ways.
>Flipkart has a division under its website for artisan-based products with sustainable packaging known as Flipkart Samarth.
>Blinkit claims to have been using only bio-degradable packaging for the past year for all its deliveries. To make its shipping carbon neutral, they are focused on making use of e-vehicles.
Regulatory compliance and legal obligations
Governments and regulatory bodies across the globe have introduced many environmental and ethical standards for e-commerce brands to comply with. Many central and state governments are introducing stricter environmental laws to protect their land, water, and biodiversity. With these laws and regulations, brands need to adapt to sustainable solutions in their packaging and shipping.
>India banned the manufacture, distribution, stocking, sale, and use of selected 19 single-use plastic items with effect from July 1, 2022. The impact of this led to many e-commerce brands shifting to more sustainable packaging materials.
>The European Union’s also banned single-use plastic which meant that brands operating in the EU needed to comply with these new regulations. They must adapt their e-commerce packaging to still be relevant in the EU.
These regulations compel brands to either adapt and thrive or face legal consequences and even potential extinction.
Environmental groups and climate activism
They play a pivotal role in driving e-commerce brands to change their operational practices. There are many organizations and associations that work to raise awareness among consumers about the environmental and social impacts of e-commerce operations. This puts pressure on brands to act. Environmental groups are also known for their advocacy and lobbying for stricter regulations and standards for the e-commerce sector. They also hold influence over conscious investors. Some environmental organizations are offering eco-certification awards to demonstrate a commitment to sustainability via certain brands. Pushing brands to adapt and implement sustainable practices and gain credibility.
>India Climate Justice, Youth for Climate Justice, and Greta Thunberg’s Friday’s for Future Movement are some examples of climate activism groups that have a significant role in shaping sustainable practices across industries.
Risk mitigation and long-term practicality
We are all aware of the risks that climate change poses to our planet. It has a significant impact on supply chains too. Brands recognize that sustainable initiatives help them mitigate risks associated with supply chain disruptions, resource scarcity, and damage to reputation. As consumer demand is shifting to more eco-friendly practices, brands acknowledge that a long-term commitment is necessary to future-proof their business. Adopting responsible practices, they can ensure the resilience of their operations while building a competitive advantage in the market.
> Beauty and wellness brand like Plum runs a recycling programme called #Empties4good where consumers can send clean, empty, and dried-out beauty containers to Plum to earn ₹50 discount voucher on their next purchase. Users can ship their empties directly to Plum or have the brand arrange for a pickup and earn rewards. Building a climate-conscious and eco-friendly brand image.
Brand differentiation and competitive advantage
Sustainability efforts are here to stay. Brands that recognize and embrace this have a significant competitive advantage. Environmental-conscious brand initiatives contribute to a positive brand image. It helps e-commerce brands to enhance customer loyalty, attract socially responsible consumers and investors, and strengthen their market presence. By differentiating themselves in the market as environmentally responsible brands they build a positive reputation and gain a stronghold in the industry.
>Cosmix is an Indian wellness brand that promotes plant-based superfood supplements for holistic health. They market themselves as sustainably sourced, vegan, amino acid-free, and clean ingredient list only. With their ethical sourcing, on-point marketing, and sustainable packaging, they have penetrated a tough market segment in less than two years.
>Sugar, a beauty brand in India another example of how a brand-new brand can become strong with its clean products. The brand has a commitment to clean beauty that is cruelty-free and vegan. They run their own recycling programme to keep the customer engaged post-sales. This has helped them to gain a competitive edge in the market.
Other factors that are pushing brands to make the shift toward sustainability are:
i. Ever-evolving technology landscape
As technology is continuously evolving, there is constant innovation in sustainable technologies and eco-friendly packaging. This is helping brands to make the shift to sustainability easier and feasible. Aiding many brands to make the competitive and climate-positive shift to green practices without compromising on efficiency. Sustainable innovations also allow businesses to grow and build market dominance.
ii. Global brands pledge to become 100% sustainable
As conscious consumerism is on the rise and environmental activism is making front-page news, global brands like Amazon are launching Pledge initiatives to make their operations eco-friendly. Amazon’s Climate Pledge initiative commits to net-zero carbon emissions by 2024. This is in response to the pressure from consumer activism and increasing regulations in the industry.
When global brands make news for their making drastic changes in their global supply chains, it builds pressure on their competition to meet the challenge. Pushing others to take more environmentally conscious steps in their business operations.
We can understand how the shift towards sustainable e-commerce is driven by multiple factors where brands embracing it are positioning themselves as leaders. They are gaining consumer attention and building a positive brand image and reputation.