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Reverse Logistics & the Circular Economy Summit

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The growth of e-commerce across the Asian region is set to explode. However many e-commerce sites have poor returns systems, which directly affects the use-cycle plus the ability to retain material value of products.

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Reverse Logistics & the Circular Economy Summit

  1. 1. What will it take to create an e-commerce circular reverse logistics system in Asia?
  2. 2. This presentation focuses on 2 aspects: 1. Establishing circular systems for returns based on economically viable solutions to prolong or capture their material value. 2. Establishing a circular e-commerce industry E-Commerce Circular Footprint
  3. 3. E-commerce Growth Visual Perspective
  4. 4. Source: Think with Google Projected Growth Financial Value Perspective
  5. 5. E-commerce consumer spend
  6. 6. Chinese tech giants engage in a spending & investment spree across the SE Asian region ❖ Alibaba: 18 June 2018: opens first SE Asia office in Malaysia and launches the group’s first overseas electronic world trade platform (eWTP) hub and in 2018 invests US$4 billion into Lazada. Lucy Peng, co-founder of Alibaba “...we feel very confident to double down on Southeast Asia.” ❖ JD.com: Partnership with Central Group, Thailand, follows investments into Indonesia and Vietnam. ❖ Tencent Holdings: diversifies its revenue sources outside of China particularly in gaming.
  7. 7. Returns Policies and Procedures Indian e-commerce sites have much easier to navigate returns policies and procedures.
  8. 8. Customer comments from the JV e-commerce website between JD.com & Central Group: “I ordered a pair of shoes with a ‘S’ size but a larger one came to me,” wrote Kanokjun Borripautmongkol, adding that she has been contacting customer service for more than two weeks but the right shoes have yet to arrive. Others have complained of misdelivered orders and poor online customer support, such as a 45-day wait for a refund from a credit card purchase. Source: Caixinglobal.com Are Asian E-commerce Sites Customer Focused or Sales Focused?
  9. 9. What the Research says on Returns in Asia (1)‘Embracing the E-Commerce Revolution in Asia & the Pacific’, Asia Development Bank, June 2018 ➔ Complex border-crossing procedures, regulatory burdens, and uncertain return processes continue to hinder the development of cross-border e-commerce. ➔ ...consumers need the option to return goods, which also builds trust between the two (e-commerce platform and buyer) ➔ Pickaboo in Bangladesh offers a 3-day return policy. Trust can grow if trade associations and government agencies help develop and enforce regulations and Standards - creating what is known as institution-based trust.
  10. 10. What the Research says on Returns in Asia (2)‘Handbook on E-commerce and Competition in ASEAN’, Competition Commission Singapore, 2017 ➔ ...there is a lack of trust among customers when completing transactions online, for instance with regards to data protection, banking fraud, unfulfilled deliveries, and the inability to return products ➔ Last mile delivery and the locker system in Singapore: ...it also means returning a product is easier as goods can simply be left in the locker ready for collection. ➔ The return of products is one of the biggest challenges for online retailers. Many companies offer a free returns service to reduce the burden on the customer, whilst others still charge a fee to cover the associated costs.
  11. 11. BluPort - One of the largest automated parcel terminal networks in Singapore, you can find a bluPort within easy reach,
  12. 12. Current Practices (international) The ‘Returnless Refund’
  13. 13. Returnly, the post-purchase payments company for retailers and brands that care about customer loyalty, today announced the availability of Green Returns™ enabling retailers to offer smart return policies that guarantee the best business outcome for the brand and the planet. Green Returns are especially well-suited for beauty and intimates retailers that are often required to dispose of used and opened products that pose a potential health risk, adding to the 5 billion pounds of waste that retail returns create each year. Returnly Press Release Issued 22 May 2019 https://www.businesswire.com/news/home/20190522005111/en/Returnly-Online-Returns-Beauty-Intimates-Friendlier-Shoppers
  14. 14. Circular E-commerce Industry & Reverse Logistics A circular e-commerce industry provides the opportunity to improve: 1. Material use & material flows 2. Energy use 3. Packaging 4. Product use (design for the 9Rs) 5. Supply chain 6. Water
  15. 15. The 9R’s
  16. 16. In a Circular & Climate Emergency World are these Metrics Appropriate?
  17. 17. One Example of the Importance of Circular Metrics This is in the US. What is it here in Asia? While this information comes from a survey. E-commerce market research firms do not survey this information
  18. 18. E-commerce Winners will be Decided on Circularity / Sustainability
  19. 19. Circularity Will Also Include (+ESG) Energy Products Packaging Supply chain Materials Water Emissions Waste
  20. 20. Closed Loop and Material Flows
  21. 21. Questionnaires, Supplier Scorecards & Monitoring
  22. 22. No easily available data on returns or the operations from the Asian e-commerce industry
  23. 23. NO For a circular reverse logistics system
  24. 24. But we have many of the pieces
  25. 25. The Requirements for a Circular Reverse Logistics Operations in Asia
  26. 26. Circular Reverse Logistics Operations What We Have
  27. 27. Circular Reverse Logistics Operations
  28. 28. This has potential to be a game changer
  29. 29. Circular Reverse Logistics Operations
  30. 30. Optoro’s returns optimization reroutes returned and excess inventory to the next best home, reducing financial, operational, and environmental waste. Increasing number of innovative technologies
  31. 31. Circular Reverse Logistics Operations
  32. 32. Logistics has many different offerings
  33. 33. New startups are changing the logistics landscape
  34. 34. Circular Reverse Logistics Operations
  35. 35. A world of choice for manufacturers
  36. 36. Circular Reverse Logistics Operations
  37. 37. What We Do Not Have
  38. 38. We Do Not have Any Information on ➔ Secondary markets ➔ Types or volume of returns ➔ Percentage of returns that are deemed as ‘waste’ ➔ Percentage of returns that are resold, repurposed, repaired or recycled
  39. 39. Secondary Markets In China https://www.ecommercestrategychina.com/column/what-opportunities-brought-by-the-secondary-market-to-the-e-commerce-business -in-china A circular economy extends the lifecycle of a product so it can be re-used by another user in various forms. For example, Huishoubao.com classifies recovered mobile phones into three grades: excellent, good and faulty. Excellent products are used for secondary sales. Good products are disassembled and re-circulated in the maintenance market. And faulty products are recycled directly and the precious metals are recovered by the environmental protection agency. It respectively represents the three main ways of recycling a product: second-hand sales/refurbished sales/recycling of components. No matter what type of recycling is used, they all embody the nature of the sharing economy. Like the sharing economy, the recycling economy emphasises the use of a product and does not (permanently) own a product.
  40. 40. And This... The glue to bring all the stakeholders together
  41. 41. For Economical & Viable Solutions to Emerge 1. Industry collaboration 2. Data: to support decisions to start building the business case on select products & sectors to transition to the circular economy
  42. 42. We Have to Build a Team
  43. 43. Create a Ripple Effect for More Industry / Consumer Engagement
  44. 44. Remember It’s the Business Model, Stupid There is a seismic shift going on from ‘Shareholder’ value to ‘Stakeholder’ value
  45. 45. Circular Economy Asia www.circulareconomyasia.org Visit the Knowledge Centre section of our website for the research listed in this presentation. adrienna@circulareconomyasia.org