• Consumption's not going away, but we can make it more responsible.
  • Data is the key to unlocking the potential of the circular economy.

“Big data.” “Artificial intelligence. “Supply chain.”

These buzzwords are fast becoming a part of our everyday lexicon. And because they’re bandied about so much, it’s worth taking a closer look at each of them and their role in shaping more responsible consumption.

Consumerism isn’t going away – and, we don’t believe it needs to – but we do advocate for smarter consumption.

Developing economies like China are encouraging more domestic consumption, but this leads to greater strain on resources, and potentially greater waste. Is there a way to find a better balance?

As China’s largest retailer, we think about this every day. After all, our business depends on selling more and better items to more and more customers. And my part of the business – consumer goods – covers untold amounts of items people use daily.

The supply chain behind consumption is critical. Recognizing our responsibility to lead by our actions, we have always done our part to find sustainable, responsible ways to operate our business – such as by using zero-emissions vehicles throughout our sizable fleet of delivery vehicles, building energy-efficient and solar-powered logistics centers, and employing reusable and recyclable packaging and actively encouraging our customers to do the same. Such programs are catching on and they can help, but it’s not enough.

It’s time for responsible consumption – and time for companies across the supply chain to cooperate, share data and jointly commit to making a difference.

Circular economy

What is a circular economy?

The global population is expected to reach close to 9 billion people by 2030 – inclusive of 3 billion new middle-class consumers.This places unprecedented pressure on natural resources to meet future consumer demand.

A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals and aims for the elimination of waste through the superior design of materials, products, systems and business models.

Nothing that is made in a circular economy becomes waste, moving away from our current linear ‘take-make-dispose’ economy. The circular economy’s potential for innovation, job creation and economic development is huge: estimates indicate a trillion-dollar opportunity.

The World Economic Forum has collaborated with the Ellen MacArthur Foundation for a number of years to accelerate the Circular Economy transition through Project MainStream - a CEO-led initiative that helps to scale business driven circular economy innovations.

Join our project, part of the World Economic Forum’s Shaping the Future of Environment and Natural Resource Security System Initiative, by contacting us to become a member or partner.

And, now for big data and artificial intelligence. For a retailer, in addition to the billions of physical products that pass through our systems en route to homes and businesses throughout China and the world, massive amounts of data move through the system, too. This information offers powerful insights about what people want and what they buy, as well as when and why they buy. Mining this information can lead to surprising – and surprisingly simple – innovations that can have far-reaching effects.

A lot of people are talking about designing for a circular economy, building the notion of sustainability into the product at the genesis of conception and design. I work with global consumer brands who want to reach Chinese consumers. The more enlightened companies already recognize and embrace their responsibility to sustainability by building it into product plans and supply chains from the very beginning. And they are looking for creative ways to do more. This might mean less packaging and less waste, or more efficient and sustainable ways to manufacture products.

Getting to that point requires not only the will, but also the means. Data is the lynchpin to unlocking that potential.

SDG12
With data and AI, companies can make progress on SDG12, Responsible Consumption & Production.
Image: UN

By sharing data insights with P&G’s Head and Shoulders shampoo unit, for example, we discovered customers in China wanted to know what they were putting in their hair and didn’t want unnecessary chemicals in their shampoo. Taking note of the increasing popularity of natural hair care products across its platform, JD helped the brand launch an exclusive collection of natural shampoo free of silicone. This not only removed chemicals from the chain, but also was a resounding success with customers.

After bringing our data insights to the makers of Huggies diapers, we helped them shift away from wood pulp to a new, more environmentally friendly composite material, which was also more comfortable and more effective for babies. Data analysis also showed that customers wanted less packaging, and they wanted to place fewer orders or take trips to the store for diapers, so Huggies responded with a new, larger size to meet these demands. This, too, has proven to be a winner with consumers.

These are just two simple but compelling examples of how we can collaborate to create solutions that are both preferred by consumers and great for the planet.