Why Brand Sustainability Is Critical in China

Key Takeaways : Alibaba has created many environmentally-friendly initiatives, including its 2019 Singles’ Day Go-Green campaign that over 200 million people took part in. The COVID-19 pandemic has strengthened the belief that environmental sustainability is now a necessity, and new consumer behaviors reflect this. In a country that used to be a symbol of pollution emissions scandals, consumers are now more conscious about sustainability, with 51 percent of urban Chinese consumers saying they would now rent or buy second-hand products. China Daily states that packaging made up 0.85 percent of China's total household waste in 2018, so it makes sense that Alibaba’s smart logistic arm, Cainiao, would initiate celebrating November 20 as “National Cardboard Box Recycling Day.” In 2019, Alibaba transformed its 75,000 delivery outlets into recycling stations. Meanwhile, 2,000 universities in China have established carton-sharing hubs, where boxes are recycled or reused. Alibaba customers who participated in the program could scan QR codes via their Taobao, Cainiao, or Alipay apps and win bonus “green energy” points for its Ant Forest Mini Program. Redeemed reward points could be used to plant real trees in China’s dry areas. Alibaba also has other environmentally-friendly initiatives, such as eco-friendly purchases and a game available on Mobile Taobao that allows consumers to win “Meow Coins” that can be exchanged for shopping discounts during Singles’ Day. According to Alibaba, over 200 million people took part in the 2019 Singles’ Day Go-Green campaign. In 2020, Alibaba launched more inspiring initiatives that both safeguard the environment and create value for consumers. For example, Cainiao entered a partnership with Worldwide Logistics and created the joint venture, Flying Fish Supply Chain Technology, which establishes a one-stop logistic service framework for eco-friendly business, according to The Loadstar. “Cainiao, together with Worldwide Logistics and CargoGM, will integrate Alibaba’s ecological business flow resources, Worldwide Logistics’ global offline logistics capability and CargoGM’s digitized logistics ability to build an end-to-end global digital ecological system, empowering and enabling the industry,” said Zhao Jian, general manager of Cainiao Global. Moreover, in January, the Chinese giant launched the Alibaba Business Operating System (ABOS), which empowers traditional retailers to accelerate growth through digital transformation. For Singles’ Day 2020, the Anglo-Dutch multinational consumer goods company Unilever benefited from ABOS’ tools by using a new artificial-intelligence-powered recycling device that scans garbage and recognizes plastic. Alizila highlights how the high-tech tool “collects recyclables to process and reuse, including repurposing them into new product packaging.” Consumers who interact with Unilever through ABOS are compensated with Alipay Ant Forest‘s green energy points and e-vouchers that offer discounts for other Unilever products sold on Alibaba’s websites. This technology-based solution is useful for cities and businesses that want innovative solutions to disputes, such as with the “bin controversy” from July 2019, when netizens took social media by storm to complain about their fear of making mistakes with their trash bins. In China, failing to obey new recycling laws comes with financial penalties and even a lowered social credit rating. In a country that used to be a symbol of environmental abuses and pollution emissions scandals, consumers are now more conscious about sustainability and social responsibility. No wonder China has the world’s largest sharing economy, and young consumers there have favorable attitudes towards social sharing. According to Mintel's research, 51 percent of urban Chinese consumers will rent or buy second-hand products to help safeguard the environment. That percentage is even higher for a demographic called Mintropolitans: a segment made up of educated, sophisticated, 20-to-49-year-old consumers who pursue a high quality of life instead of just wealth. Over 63 percent of Mintropolitans engage in the sharing economy because they understand that these practices are favorable for the environment. “The fact that consumers are placing such an emphasis on environmental factors when choosing to partake in the sharing economy aligns with the Mintel Trend Total Wellbeing,” says Scarlett Zhao, an associate research analyst for Mintel China. “Under the healthy wave, consumers today not only look inward to their body health but are also paying more attention to the whole ecosystem they are interacting with.” In November 2019, AliResearch data showed that more than 380 million consumers acquired eco-friendly products on Taobao and Tmall over the past year. According to Alizila, 41.8 percent of these consumers were born after 1990, and 32.9 percent were born after 1980. This push toward ethical and “green” consumerism is forcing brands to become more value-driven and sustainable. For example, Alizila reports that during the 2019 Singles’ Day shopping festival, close to 40 brands on Tmall — including L’Oréal and Giorgio Armani Beauty — used eco-friendly packaging materials. The COVID-19 pandemic has strengthened the belief that environmental sustainability has become a necessity. As such, new retail consumer behaviors and shopping attitudes reflect this increased interest in health and sustainability. According to a post-COVID-19 McKinsey & Company survey on consumer attitudes in China, 64 percent agree or strongly agree that they would consider products that are more environmentally friendly. In the end, the Communist Party’s plan of building an “ecological civilization with Chinese characteristics” seems to be coming to fruition, thanks to the concentrated efforts of public and private actors and changing consumer sentiments and behaviors.

Why Brand Sustainability Is Critical in China

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Published November 25, 2020

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Why Brand Sustainability Is Critical in China