China’s leading ecommerce platforms, such as Alibaba and Pinduoduo, have become a “bottleneck” for environmental progression according to recent research by Greenpeace.
According to Chinese government agency, the China Internet Network Information Center, the number of online shoppers in China rose to 884 million by June 2023, meaning that four out of every five Chinese citizens is an online shopper.
Greenpeace states that Chinese ecommerce platforms have completely reshaped the way Chinese citizens shop, an influence which is now extending beyond China’s borders as Chinese Amazon rival, Temu, sweeps into the UK and US.
Greenpeace found that only three of the six companies examined had waste management strategies to protect against environmental harm. Additionally, whilst Greenpeace reported that ByteDance had publicly stated that it would remove sellers’ products that harmed the environment, illegal hunting supplies and traps were still available to buy on its platforms Kuaishou and Douyin as of late August 2023.
Overall, the report ranked online agricultural retailer, Pinduoduo, as having the worst environmental impact, despite registering continuous double digit revenue growth and the second largest userbase.
Greenpeace’s East Asia project manager Tang Damin was pessimistic on the future performance of China’s ecommerce industry.
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“I’m worried that these companies are becoming bottlenecks for progress,” she stated, “There’s been clear progress for some of these companies since the last time we did a formal analysis. But overall, China’s e-commerce giants still don’t do enough to leverage their platforms towards sustainability.”
In a 2023 GlobalData survey, over 40% of participants stated that for many companies ESG principles were solely seen as a marketing exercise rather than practice values. In the same survey, 36% of participants stated that their company did not have its own ESG policy whilst a further 26% did not know if their company had any.
In spite of the tremendous environmental impact that ecommerce has, in its thematic report into the sector GlobalData forecasts that the industry will continue to grow as convenience becomes a commonplace demand for consumers.
“Consumers have grown reliant on the services ecommerce provides,” explains the analyst company, “which allow them to purchase items and have them delivered to their homes, sometimes in an hour.”
The Covid-19 pandemic and subsequent lockdowns were a major catalyst for growth in the sector, forcing many consumers into the world of digital shopping despite their previous behaviours.
Alongside the convenience for shoppers, opening up online also allows for retailers to grow consistently in a speed previously unheard of. Online shops can now be open 24/7 and collect vast amounts of customer data, which is also highly valuable.
By 2027, GlobalData forecasts that the ecommerce sector could easily be worth $9.7trn.
In wake of this growth, Greenpeace calls for Chinese ecommerce giants to set up comprehensive ESG policies that are acted upon and consider the environmental impacts across the entire supply chain.