Framing Sustainability for E-commerce: Introducing the E-commerce Sustainability Quotient Matrix

Mar 25, 2015

E-commerce is changing the way people shop globally. Over the last two decades, multi-billion dollar e-commerce companies have come into being. Even as they see increasing scale and success, e-commerce companies have not turned their focus on environmental sustainability – in stark contrast to the initiatives on sustainable production and consumption undertaken by world’s leading retailers like Walmart and Ikea.

Realizing the acute need for the e-commerce industry to start thinking about their environmental impact, Sustainability Outlook delved deep into e-commerce operations to create an E-commerce Sustainability Quotient Matrix. The E-commerce Sustainability Quotient Matrix will help guide e-commerce companies to assess their preparedness and current state when it comes to environmentally sustainable operations. This matrix also provides an indicative path that e-commerce companies should embark upon to make their operations greener.

The E-commerce Scenario in India

E-commerce has suddenly exploded in the Indian marketplace. What was a non-existent concept ten years ago is now a $3.5 billion industry with about 20 million active users and an annual growth rate of 34%. Flipkart and Snapdeal have set targets of Gross Merchandizing Value (GMV) of $8 billion and $10 billion respectively for 2015 as the market gets ready to see even greater growth.

Environmental Impact of E-commerce vs. Brick- and- Mortar stores

Various studies have consistently underlined that e-commerce has a significantly lower environmental impact than physical retail stores. This is primarily driven by the reduction in consumer transport to and from the stores, which is replaced by last-mile delivery for e-commerce. Multiple products to different addresses are consolidated in the e-commerce last-mile delivery system and as the number of users of e-commerce grow the per-item footprint of last-mile delivery drops significantly.

To read the complete report, click here.