Alibaba Moves to Promote Sustainability in China

As China strives to achieve carbon neutrality by 2060, more and more domestic consumers are embracing greener shopping options. According to a 2021 report by PWC, 72% of surveyed Chinese consumers said they buy from environmentally responsible companies. A Statista global consumer survey also finds that in China, only a 17% minority regards sustainability as a mere buzzword lacking importance.

However, research conducted by various institutions also points out the major challenges to reaching sustainable consumption goals in China. A survey released by Chinese media outlet Jiemian, for example, shows that around two thirds of respondents found it hard to tell if a product is “truly low-carbon.” The aforementioned PWC report also finds that “the lack of sustainable options” has been the biggest barrier to Chinese consumers’ opting for greener consumption.

“I think this is a huge opportunity for brands that want to drive sustainable growth in China,” said Chris Tung, Chief Marketing Officer of Alibaba Group in a webinar event regarding sustainable consumption in the country.

As China’s largest e-commerce company, Alibaba has millions of merchants and a billion consumers across its range of platforms. With its strong position in the country’s platform economy, Alibaba has been taking meaningful steps to help both brands and consumers overcome these barriers.

To help consumers access to more eco-friendly brand and product options, Alibaba is working to spotlight more sustainable products on the company’s e-commerce platform. Specifically, Alibaba provides brands with a comprehensive toolbox to better communicate with customers. One such feature is livestreaming. Since its launch in 2016, livestreaming has become the single most successful e-commerce model in China, and brands can now use it to promote their sustainable mission. For example, San Francisco-based sustainable footwear brand Rothy’s often invites their consumers – also known as “KOCs” (key opinion consumers) – to join livestreaming sessions to tell their brand story and the company’s sustainable goals.

As Chris Tung noted, “Education is critical.” Informed consumers are always in a better position to make sustainable choices because they are more aware of the impact their shopping behavior could have on the environment. By helping eco-friendly brands showcase their sustainability commitments with a broad range of digital tools, including marketing campaigns, cloud solutions and logistics, Alibaba gives Chinese consumers access to more information about sustainable consumption, and empowers them to make decisions that generate sustainable outcomes. At present, brands like Allbirds, Rothy’s, drinkware brand Klean Kanteen, British tea brand Tee Pigs, Paris-based clean beauty brand La Bouche Rouge have all seen success on Alibaba‘s B2C e-commerce platform, Tmall.

Another strategy that Alibaba uses to educate customers is the carbon labeling feature that Tmall is piloting, which not only allows consumers to identify eco-friendly products on the e-commerce platform, but also informs them of the carbon emissions they could save by purchasing certain products. To encourage sustainable consumption, Alibaba is also building green footprint accounts, an achievement system for merchants and consumers to accumulate “green points” by following the right low-carbon standard.

First and foremost a tech company, technology is at the center of everything Alibaba does. If we think of electric cars or smart farming, it is undeniable that digital technologies have had significant contribution to sustainable values. But there are drawbacks, too. At the core of these technologies are data centers, which consume a large amount of electricity and generate considerable carbon emissions. How do we tackle this then? Alibaba‘s fintech arm Ant Group offers some inspirations.

On Tuesday, Ant Group, announced that with innovative technologies such as blockchain and green computation, it has achieved carbon neutrality in its own operations, according to 2021 emissions figures certified by the China Environmental United Certification Center (CEC). During the “11.11 Shopping Festival” in 2021, Alibaba reduced computing resources by as much as 50% during peak time through its cloud-native technologies. In 2022, Alibaba‘s cloud-based broadcast distribution system saw a nearly 40% reduction of onsite broadcast personnel compared to the last Winter Olympics, significantly reducing the total carbon footprint of the Games. And now, technologies like these are being used across the entire retail industry, throughout the value chain.

For companies that hope to go green, profitability presents an unavoidable challenge. Is there a business case for brands to go green? “The answer to that is, by doing good, we can do well,” said Alibaba‘s Chris Tung. “We see clear demand signals from consumers for green products, so this is not just a push from the supply side. It’s a significant business opportunity for brands,” he added.

Indeed, as the Statista research cited above indicates, 80% of Chinese consumers responded that they would be willing to pay more for delivery if CO2-neutral shipping were guaranteed in return, and brands with substandard sustainability policies are more likely to face boycotts by Chinese consumers – 17-19% of respondents have already done so. When it comes to green products’ prices, which are usually higher than regular ones, Chinese consumers are somewhat less price-sensitive compared with consumers in other parts of the world, with only 28% citing “over-priced sustainable products” as the barrier to sustainable buying, whereas the global average is 44%.

SEE ALSO: Alibaba Pledges Carbon Neutrality by 2030

JuE Wong, CEO of beauty brand Olaplex, also notes that one of the top questions the company receives from their Chinese customers is about sustainable options. “In China, the consumers are basically asking [for sustainable solutions]… Sustainability is no longer a nice-to-have, it is table stakes. Companies that think they can make this a marketing message are actually fooling themselves. We need to make it part of who we are, because consumers vote with their wallet.”