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Policy Review: Impact of Waste due to packaging in E-commerce Industry

Impact of waster generation due to packaging in the e-commerce industry

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1. Introduction

COVID-19 era has seen abysmal records of increase in waste generation in India and across the world. While technology did make life simpler in many ways, it was accompanied by adverse impacts on the environment. The e-commerce industry is one such example of technological advancement, especially during the pandemic, where the waste generated led to a disastrous impact on both, environment as well as humans. Basic packaging of products comes in multiple layers including plastic, paper, bubble wrap, air packets, tape, and corrugated boxes to say the least. Though most of these products are recyclable, there are many aspects that contribute to environmental and health hazards..

In general, plastic waste generation has contributed significantly to the issue of the changing climate. It was found that 29 particles of microplastics per litre were found in freshly fallen snow in Antarctica[1]. Specifically for packaging that uses wood pulp, tons of trees and landfills are being cleared to satisfy the customer who might be interested in buying an inexpensive item. 3 billion trees are being pulped annually to produce 241 million tons of shipping cartons[2]. Plastic packaging takes about 400-500 years to degrade and with most of it ending up in our oceans, causes great harm to marine life[3].

Moreover, waste generation can also adversely impact health, for example, an average individual can potentially consume 5g of plastic every week[4]. The chemicals used in the production of packaging materials affect human health as they enter our food cycle. Some of these include chemicals such as brominated flame retardants, polyvinyl chloride and Bisphenol A, which is an endocrine disruptor. As per a report by Down to Earth, Vinyl chloride, used to manufacture PVC, can severely impact the central nervous system causing headaches and dizziness.

Long-term exposure to vinyl chloride can result in cancer and liver damage. Excessive exposure to even small quantities of Styrofoam, a common filler in packaging material, can cause fatigue, nervousness and sleep disorders. Lastly, as plastic also takes time to degenerate, the discarded packaging material is also incinerated leading to release of toxic gasses that harm human health[5].

2. Aim

Against this backdrop, it is of utmost significance to counter the problem before it goes beyond control. The issue needs to be addressed at the earliest as the e-commerce industry is only expected to grow in the coming years. It is predicted that the parcel volume will probably more than double and reach 220-262 billion parcels by 2026[6]. The aim of the study is to, therefore, understand the impact of waste generated via external packaging in the e-commerce industry. In doing so, the study ultimately seeks to recommend solutions to the problem of waste generated in India catering to forming better policies, fostering a circular economy and giving consumers the choice to make adjustments to their delivery processes through sustainable methods.

3. Methodology

The study relies on both primary and secondary data sources. The team collected primary data by conducting a survey form three key stakeholders - consumers, professionals working in the sustainability and environment sector and professionals working with e-commerce brands like Amazon, Myntra, Jabong, etc. who are specifically involved in the stages of product design and management.

The project also relied on articles and reports published by various private companies and multilateral organizations. The survey was conducted in 2022 and the team received 74 responses.

4. Analysis

India contributed 125.4 million pounds of e-commerce plastic packaging waste in 2019[7]. While some plastics can be recycled, a significant proportion ends up in landfill sites, which does not help the problem but delays it for the future years. As per data from the Ministry of Environment, Forest & Climate change, only 20% of the collected waste is processed while the 80% goes straight into the dump sites[8].

Mismanagement of plastic wastes is a problem for less developed countries such as India due to ineffective waste management systems. India is projected to be the fifth highest contributor towards mismanaged plastic waste by 2025[9].

5. Survey Results

As high as 52% survey respondents , mentioned that they throw off/discard the external packaging (Fig 1). With the current waste management systems in place, the packaging would inevitably end up in the landfills.

Fig. 1 Survey question: How customers use the external packaging after receiving the product?

74.7% of the respondents rated paper-based external packaging to be the best option available.

It is possible that due to the negative externalities involved with the use of plastic packaging, the consumers have been conditioned to think that sustainability in e-commerce packaging can be achieved through paper and paperboard materials for packaging. (Fig. 2)

Fig. 2 Survey question: Which is the best option for external packaging?

However, paper packaging isn’t entirely benign- some 3 billion trees are harvested every year to meet paper packaging needs currently – a rate that makes its sustainability questionable[10]. Several companies have already started focusing on the recyclability, reusability, composability and biodegradability of the external packaging of the material.

The World Bank Report on Waste generation states that, “Waste composition differs across income levels, reflecting varied patterns of consumption. High-income countries generate relatively less food and green waste, at 32 percent of total waste, and generate more dry waste that could be recycled, including plastic, paper, cardboard, metal, and glass, which account for 51 percent of waste. Middle- and low-income countries generate 53 percent and 57 percent food and green waste, respectively, with the fraction of organic waste increasing as economic development levels decrease. In low-income countries, materials that could be recycled account for only 20 percent of the waste stream.”

Fig.3 - World Bank

Fig. 4 World Bank

Since March 2020, corrugated box shipments have jumped 9 percent according to the Fiber Box Association. Technavio, a market research firm, estimates that demand for filled-air products is poised to swell by $1.16 billion between 2020 and 2024 because of the spike in online sales.

6. Case Study: Flipkart’s action on plastic packaging in India

India generates 9.46 million tonnes of plastic waste annually, of which 40% remains uncollected; 43% is used for packaging, most of it is single-use. Packaging uses 40% of all plastic produced, but the average “working life” of a plastic bag is only 15 Minutes resulting in massive resource and energy loss.

While this exposes companies with large quantities of plastic in their supply chains to material and reputational risk, it also presents them with the opportunity to innovate by introducing more sustainable options.

With a user base of over 400 million across India, Flipkart Group companies, including e-commerce marketplace Flipkart and leading fashion destination, Myntra, have eliminated 100% single-use plastic packaging in their own supply chain by working with suppliers, state governments, policymakers, thousands of sellers and other ecosystem stakeholders.

Flipkart's ambition was to use the strength of its platform to do good for people and the planet.

Considering this, they wanted an approach that created long-term value for communities by incorporating environmental, social and governance aspects in doing business. After a careful study of their value chain, the consumption of single-use plastic was one such problem that they wished to gradually reduce and eventually eliminate.

With Flipkart’s belief in building collaborative partnerships and relationships, it gave the collective voice of multiple stakeholders who demanded sustainable business practices to bring about a transformational change in the supply chains, guide policies, create awareness and catalyze practical, sustainable Solutions a platform to be heard. As a result, Flipkart collaborated with WWF India under the Un-Plastic Collective (UPC) - a voluntary, multi-stakeholder initiative, to drive corporate action toward solutions on plastic leakage. The aim was to unlock barriers to circularity and create new business models to transform the plastic packaging sector by amplifying the collective voice of multiple stakeholders across the value chain.

This milestone was achieved through a structured approach supported by four pillars –

  1. Engagement :

  • Working with policymakers to define sustainable packaging for the industry;

  • Consulting with stakeholders and deliberate on Plastic Waste Management Rules; and

  • Working with state legislators to enhance the public infrastructure for recycling

2. Innovation:

  • Working with startups to identify different solutions to substitute single-use plastics in the e-commerce supply chain; and

  • Working with global industry leaders to find scalable solutions to replace single-use plastic.

3. Compliance:

  • Educating a community of sellers, consumers, and employees on the environmental impact of plastics.

4. Capacity building:

  • Working with designated recyclers to ensure compliance with EPR regulation across the country; and

  • Ensuring going beyond all state-level policies for specific materials.

Below are some of the key learnings :

Data-based goal setting: Ensuring a data-driven approach to waste management and regularly tracking the impact of alternatives. As the world moves towards a zero-waste future, all the waste management practices have helped in creating an understanding of our plastic consumption across the value chain.

An open view: Creating an ecosystem view of the entire waste management journey for plastic packaging.

Play by-the-book: Creating a state-by-state playbook for training and education for all stakeholders- employees, consumers, and suppliers.

Keep focussing on alternatives: Identifying and implementing the right alternatives to plastic that can sustainably replace plastics.

7. Case Study 2

According to a report from Digital Commerce 360, healthcare e-commerce is growing at an annual rate of 16 percent, outpacing the overall e-commerce growth rate of 15 percent.

A strong revival in consumer spending amid the waning impact of the Covid-19 pandemic will also help the paper packaging industry bounce back with a revenue growth of 15 per cent this fiscal, ratings agency Crisil said.

With the increase in home deliveries of medicines and pharmaceuticals – accelerated by COVID-19 – it is important to implement sustainable packaging early in the supply chain to ensure not just speed and security, but to minimize the environmental impact.

Boots UK patients will start to receive their medicines in brown paper bags when they order from their stores.

The new bags are made from unbleached, Forest Stewardship Council (FSC) certified recycled brown paper; printed with water-based inks so the bags can be easily recycled at home. Sourced and manufactured in the UK, the bags display the On-Pack Recycling Label (OPRL) standard, which helps patients to recycle correctly and more often.

As a proud member of the UK Plastics Pact, Boots switched to unbleached (brown) paper carrier bags as standard in 2019, removing more than 9002 tonnes of plastic from its stores each year. By March 2020, it was also announced that more than 10 million Boots prescription bags sent from its Dispensing Support Pharmacy in Preston would now be made using compostable material rather than traditional plastic each year.

Taking another step in its mission to become more sustainable, Boots also reduced the plastic packaging used in its deliveries by 76%, saving 136 tonnes of plastic every year,3 and endeavoured to be 100% plastic free in online deliveries by the end of 2021.

8. Recommendations

The recommendations are divided into app-based and policy-driven recommendations. (i) App-based recommendations include suggestions that could be incorporated into the apps itself that could help in reducing waste. They are the features of:

a. Reverse Logistics, that involves returning the packaging to the company itself;

b. Awareness with personalized dashboard, includes making customers more aware and sensitive with regards to their consumption of products;

c. Combined delivery feature, gives the option to the customers to get their orders delivered in bulk, instead of individually-packed items; and

d. AI-powered solutions to save resources, by facilitating better and more sustainable design that aims to reduce extra space and material used for packaging the products.

(ii) Policy-driven recommendations focus on the actions and regulations that both governments and e-commerce companies can bring in to facilitate adoption of sustainable packaging that reduces the waste generated. The recommendations under the policy and governance aspect include:-

a. Government Subsidies; and

b. Public private partnership for awareness campaigns

8. 1 App-based Recommendations

8.1.1 Reverse Logistics

According to the 2019 Circularity Gap Report, only 9% of the current global economy is circular and worse, it is even witnessing a downward trend. The major concern after shifting to alternatives like paper bags, honeycomb mesh instead of single use plastic and bubble wrap is that the packaging material mostly ends up in landfills, which leaves little possibility for the waste to become a part of the value chain again. As the data reflects, nearly 52% of participants discard the packaging material out of the value chain and less than 5% initiate recycling.

Fig 6 - Source - Circular Solutions

Therefore, it is crucial to foster a circular economy and facilitate reverse logistics of the packaging material so that it diminishes the need to extract new resources to create packaging material and subsequently reduce waste. Fortunately, 89.2% of the survey participants are willing to return the packaging material without any incentive. This not only shows initiative on the part of the consumers but also reinforces the idea of building a circular model that is based on reusing and recycling.

After using the packaging material, the suggestion is to return the material when a customer gets their order the next time, thereby saving on the transportation costs that may be required to facilitate reverse logistics.

However, the following changes may exist with the proposed recommendation:

  1. Customer awareness

  2. Transportation

  3. Storage

  4. Partnering with companies responsible for packaging

Fig 6: Survey Question: Would you be willing to return the outer packing material

8.1.2 Awareness with Personalized Dashboard

This recommendation seeks to influence consumer behaviour towards sustainability and encourage eco-friendly choices which could potentially result in achieving the objective of reducing waste. It is, therefore, suggested that building an interactive dashboard that displays their consumption per day/month/year, wherein the customers can calculate their consumption and keep a track of every action taken by them to reduce their consumption, can help towards reducing the waste. This can be done with the use of advanced analytics, artificial intelligence and machine-learning models. Additionally, it is also suggested that the e-commerce companies take an initiative to incentivize and encourage these initiatives with minimal reward points to facilitate change amongst the consumers.

One such example is of Amazon US which has initiated climate-pledge friendly aspects in its shopping space.. They have partnered with companies that are environment-friendly and provide a certificate that ensures sustainability standards. The banner, “Climate-pledge friendly” ensures that users understand the positives while shopping online, which encourages responsible consumption.

Fig 7 - Amazon Climate Pledge - Amazon Shopping App, USA

Amazon India on the other hand is ensuring that its packaging material in the form of corrugated boxes and paper cushions contains as high as 100 percent recycled content and is also fully recyclable.

The plastic currently used in packaging mailers and bubble bags is made of 20 percent recycled content and is also recyclable. In 2019, Amazon India declared that it was developing plastic-free alternatives for packaging mailers, bubble bags, stretch wrap and tape used in the packaging which will help the company eliminate all forms of plastic used in its packaging.

While Amazon is one of the few companies that works on sustainable solutions. With the growing popularity of the e-commerce industry, there are many that are far from taking a step ahead. We emphasize that it must be a prerogative for companies to come up with viable solutions.

8.1.3 Combined Delivery date Feature | Reducing multiple deliveries and packaging

Another recommendation for the e-commerce giants is to give their consumers the option of getting multiple products delivered together. The data revealed that 78.4% of people would like to receive their products together. The assumption is that while it will be helpful in reducing the amount of packaging material that would otherwise be used, it will save the e-commerce outlets the costs for transportation with multiple deliveries to the same location. An additional benefit for the companies would also be a reduction in the carbon footprint of the e-commerce companies on one hand, and more convenience to the customers on the other hand.

Fig 8 - If given an option, how often would you like to receive your product delivered together?

8.1.4 AI-powered solutions to save resources

1. One key issue concerning the packaging waste in the e-commerce industry is the unnecessary use of resources for packaging material especially the cardboard boxes. E-commerce companies in their bid to move towards sustainability have limited the use of plastics and increased the use of paper/ paper-based packaging material. The massive demand of cardboard since the pandemic for packaging has led to global episodes of cardboard shortage, so much so that it has been dubbed as “beige gold”[11]. However, research by DHL shows that 24% of the package volume inside the cardboard boxes is empty space[12].It also leads to unnecessary shipment space inside the transport trucks by up to about 50%. Our primary research shows that this problem is ubiquitous with 83.5% respondents having come across an over-packaged product either frequently or sometimes (Fig.9)

Fig. 9 - Survey question: How often do consumers come across an over-packaged product?

With up to 80% of the environmental impact of the packaging material being decided at the design stage[13]. It is imperative for large e-commerce companies to implement solutions at the initial stages to curb the use of excess resources. However, the current scale of e-commerce operations have made it near impossible to manually inspect each and every shipped item in order to choose the right packaging. Amazon has pioneered to solve this problem by implementing AI/ML to adapt to the ever-changing circumstances. In the last six years, these tools have helped Amazon to eliminate more than a million tons of packaging, equivalent to more than 2 billion shipping boxes, which amounts to a reduction in 36% in shipping weight[14].

The AI algorithm for Amazon works in numerous ways. It can make packages lighter by specifying padded mailers instead of boxes. It also suggests items in the cart that can be packaged together[15]. AI also factors in the real world complaints data to identify the products that are usually over packaged. With 93.6% of the consumers claiming to have complained regarding external packaging (Fig 10), there is a definite use-case for other e-commerce giants to follow suit & use the complaint data to solve the problem of over-packaging.

Fig. 10- Survey question: How often do consumers complain regarding external packaging?

2. Ideally, every order received by Amazon that required a box would be shipped in a box tailored exactly to the size of its contents to minimize cardboard (corrugate) waste for the customer and maximize the efficiency of order fulfilment.

However, with an ever-changing catalogue of hundreds of millions of items and multiple items often shipped in a shared box, this dream scenario would require a near-infinite range of box sizes standing ready at Amazon’s fulfilment centers (FCs).

While Amazon is working towards producing right-sized boxes for each shipment, the current solution to minimize waste is to furnish every fulfilment center with a limited suite of cardboard box options. These suites vary depending on the type of items being fulfilled. For example, some FCs are focused on shipping single or multiple items that have been sorted automatically by robots and packed by Amazon associates.

In North America, single items shipped from sortable FCs that require a box, with some exceptions, are typically shipped within one of a finite number of box sizes. Multiple items being shipped together are packed into a box drawn from a different suite of boxes that are designed for a larger and heavier payload.

Another type of FC, known as non-sortable, deals with larger items that require oversized boxes — patio furniture, for example — and these FCs need yet another suite of boxes.

The question that Amazon has addressed with increasing success over the past few years is this: What is the optimal box suite? That answer is embodied in a pioneering web-based tool- PackOpt- that Amazon is embracing globally.

By the end of 2022, about 90% of all boxes shipped by Amazon will be sent from an optimized box suite. In North America, applying PackOpt technology has resulted in an annual reduction in cardboard waste of 7% to 10%, saving roughly 60,000 tons of cardboard annually. In emerging countries such as Singapore, PackOpt has delivered more than double that percentage efficiency. Pioneering web-based PackOpt tool has resulted in an annual reduction in cardboard waste of 7% to 10% in North America, saving roughly 60,000 tons of cardboard annually.

Companies across the world are taking measures to reduce, condense or eliminate packing for products. Companies such as Amazon are taking measures by being climate conscious and substantially erasing those products that do not require excessive outer packaging. The image below is from Amazon US. Material utilized is also environment friendly.

Fig 11 - Amazon sustainability webpage

8.2 Policy-driven Approaches

Fig. 12. McKinsey Analysis

8.2.1 Government subsidies:

Circular economy is the future. Europe as a continent has already taken multiple steps in this direction. “Future EU legislation should focus on the entire life cycle of products to promote the circular economy. Production, consumption and waste-treatment in the packaging industry are key in advancing towards a sustainable future. The paper titled, ‘Making packaging a safe, affordable and eco-friendly industry’, “Circular economy processes and sustainable consumption must be encouraged in order to avoid waste and keep used resources in the EU economy for as long as possible.”[16]

By 2030, all packaging should be re-used or recycled, according to the Circular Economy Action Plan 2.0. In order to achieve this objective, all packaging materials should be valued in the pursuit of the circular economy goal, with an emphasis on eco-design, current and future recycling technologies, and strong measures to combat dispersion.

India is not very far from achieving this too. Government subsidies and lucrative plans for ecommerce industries can reap lots of benefits for industries, especially those in the packaging.[17]

8.2.2 Communication and Awareness Plans

Over the years, India has witnessed many sustainability campaigns including banning plastic, separation of dry and wet waste, Swachh Bharat mission etc. However, the awareness created by this program is temporary and its reach limited. Therefore, it is imperative for private companies to take initiative and promote similar campaigns to widen their scope of influence. For instance, Mahindra’s #CutTheCrap initiative is a powerful program that aims to sensitize the public about the detrimental impacts of plastic usage and consequently inculcate better waste management practices[18].

Therefore, it is recommended that both public and private companies enter into a partnership to foster campaigning that reaches the masses and creates a bigger impact in terms of awareness. A public Private Partnership, therefore, would be extremely beneficial, scalable and impactful.

9. Conclusion

Waste produced from the e-commerce industry is detrimental to not only the environment, but also human health. However, the magnitude of the issue questions the adoption of a unidimensional approach. The study throws light on the different stakeholders involved in both generating and managing the problem of waste. Therefore, it is concluded that the problem of waste generation via the e-commerce industry cannot be resolved in silos, thereby calling for a multifaceted approach. The paper includes recommendations specifically for the e-commerce apps as well as suggestions under the theme of policy and governance. However, since there is no one way to tackle the problem, it is recommended that all the involved parties take action on their accord to pave the way for a sustainable future.

Meet The Thought Leaders

Laboni Singh is a mentor at GGI and is currently working at The Bridgespan Group as an Associate Consultant. She takes keen interest in socioeconomic development issues, public policy, and equity across different vectors of gender, caste, class, and ability, which in turn fuelled her transition from working at a global bank to the social sector. She is an Urban Fellow from the Indian Institute for Human Settlements, Bangalore and has a bachelor's degree in Economics from St. Stephen's College, University of Delhi.

Meet The Authors (GGI Fellows)

Tejaswini Vavilala is an International Development and communications professional with experience in Public Affairs related roles across non-profits and corporate entities in India and the United States. She holds two Master’s degrees in International Affairs and Public Relations from The New School and Indiana University, respectively. In the past, she has worked at the International Rescue Committee, Global Policy Forum, CA Technologies, and United Nations (UNFPA) among others. Tejaswini currently co-leads a non-profit called Sphoorti Foundation in Hyderabad, India. Sphoorti has been supporting over 1500 destitute children who come from underserved communities. In addition, she is supporting over 600 women by teaching them vocational skills. She oversees and is responsible for the operations, including project management and fundraising aspects of the organization. As the Director of Projects, she works on building strategies to ramp up engagement to deliver 100% results that are impactful and sustainable. She has a solid foundation in development studies, research, and analysis combined with an in-depth and interdisciplinary understanding of international affairs' complexities. During her time in the corporate and development sector, she was engaged in leading many projects to build cross-functional partnerships to strengthen commitment.

Yash Shukla is an incoming PGP candidate at the Indian School of Business. He is a 2017 engineering graduate from National Institute of Technology Raipur, with 4.5 years of experience in the Marketing division of Indian Oil Corporation Limited. During his time at IOCL, he managed B2B sales of petroleum products through distributor/dealer network in rural Maharashtra. He was one of the officers responsible for the implementation of LPG-related government schemes such as the Pradhan Mantri Ujjwala Yojana & Pradhan Mantri Garib Kalyan Yojana in four rural districts in Maharashtra. Post the PSU experience, he now aspires to get into a top management consulting firm in its energy practice.

Aryaka Shandilya is currently working as Assistant Manager with Ceat.Ltd. having deep expertise in Digital Analytics, process optimization and KPI improvements across manufacturing processes.

Her work involves Incorporating ML and AI technologies to enhance business value proposition along with sustainability.

Her area of keen interests are strategy, Implementation, consulting and product management.

She completed her undergraduation from NIT Raipur with major in Electrical engineering, she is a wanderlust, a great foodie and love to explore new places to understand diversified cultures

Rishabh Khampariya is an analytics professional with 5+ years of experience in Data Science & Business Analytics across industries. He started his career with Mu Sigma Business Solutions, where he worked for Microsoft as a client, helping the software giant with insights on their search engine platform Bing.

He has also worked with Axis Bank retail loans leadership team on business monitoring, Cross-selling, Pricing & Geo strategies and Amazon Launchpad India team as Brand Insights Specialist where he worked with brand associates handling 1000+ brands and helped them improve brand performance through data analytics.

Currently Rishabh is working with as a Lead Product Analyst and handling complete analytics & strategy support for ‘Pay On Credit’ product which caters to ₹1000cr+ worth of transactions every month.

Rishabh is also associated with Impact Consulting as an Engagement Manager and Mentor with Claylabs Education.

Rashi Agarwal is working as a Sustainability Specialist at Environmental Management Centre, based out of Mumbai. She completed her master’s degree in International Affairs from the National University of Singapore in 2022 during which she realized her passion for contributing towards addressing the disastrous threat of climate change. Therefore, she also co-authored a report on gender equality and climate change, as commissioned by the ASEAN and in consultation with the UN Women while working with Stockholm Environment Institute. She also got the chance to work as part of the Climate Action Platform at the Asian Venture Philanthropy Network and as a student researcher for the Institute of Public Understanding of Risk. These experiences, along with academic courses in the field of climate change and urban development has led her to actively pursue a career in the field of sustainable development.

If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.






















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