How has e-commerce grown and how can we make it more sustainable?

By: Luis Ortega Argüelles

During the last few months, we have realized how important parcel and delivery services are in society, as well as having access to online stores at all times. From entertainment to basic consumer products such as food and medicine, the different companies that are within our reach today have been able to meet our needs. 

While many people were already accustomed to making certain purchases on the Internet, the demand for home delivery during the first half of 2020 has shown an increase in e-commerce. This suggests that the following months will show a growth of up to 60% in online purchases in Mexico according to studies conducted by the International Data Corporation. This will make this year a turning-point for both the e-commerce industry and for consumers' buying habits, since the convenience of receiving at your door the supermarket or that product you wanted so much, is here to stay. 

Some products and services that have shown remarkable growth during the weeks of confinement are related to health and wellness, food, entertainment (especially subscriptions to digital streaming services) and electronic equipment. In fact, a Forbes article estimates that it would have taken four to six years to reach the levels of demand observed in May 2020, with the same growth rates of recent years.  

Demand as of April 16, 2010, compared to the first week of April 2020. Own elaboration. Source: AMVO

On the other hand, it is important to remember that there are still multiple challenges to be solved with respect to e-commerce, parcel services and delivery. If we have learned anything in recent months, it is that the way we do business lacks a focus on sustainability and that many companies' value chains are extremely sensitive and vulnerable to change. As there has been considerable growth in these services, it is not surprising that there is an increase in demand for energy, in waste generation, in the use of plastic and, of course, in greenhouse gas emissions from the use of vehicles to complete deliveries. This speaks to a need for awareness of how, where and how often to buy online, as well as the urgency for these types of services to see sustainability as a strategic element in their business model.

In a world where the only crisis is not health, it is important to address the problems that cause us less effect in the short term or that may be less evident to the people who live in cities. Such are the climate crisis and the enormous social gap that exists in the country, which are only two of the global challenges of sustainability. Thus, to make the online trading and shipping industries more sustainable, it is important to invest time and resources to make them smart, ethical, and clean:

1. Smart: A company that is able to adapt to different markets, that offers complete real-time traceability of deliveries, that monitors the quality of the products it distributes and that optimizes its loading centers, shipping systems and delivery procedures according to collective and individual consumption patterns, will manage to excel and meet customer expectations.

2. Ethic: companies both in online commerce and in the distribution of such products must take into account the needs of both the community that conforms them and the surrounding community. This includes accountability to society on issues of corporate governance, human and labour rights, anti-corruption practices, fair trade and environmental performance. Another concern is how to make the service inclusive, i.e., that people who live in isolated places, who have a disability, or who lack technological knowledge like some older people, have access to these platforms.

3. Clean: it is necessary that companies involved in online shopping reduce the use of non-renewable, polluting and single-use materials. This suggests creating recycling efforts, reducing packaging, implementing circular delivery models, efficient use of energy and of course, reducing greenhouse gases. To do this, it will be necessary to optimize distribution routes, encourage customers to neutralize the carbon footprint of shipments and even products, and explore different delivery systems by bicycle or in the not too distant future, in vehicles powered by clean energy. 

While solving these challenges means coordinating many efforts, it also means that there are many opportunities to leverage, innovate and take the next steps in an industry that, as mentioned above, is growing today more than ever. There is talk of a "new normal" all the time, so this is the time for us to shape an industry that still has a lot to learn.