With the growing globalization of business, as well as technological advancements that have changed the physical infrastructure of retail, the concept of sustainable business is ever changing. While various advancements have opened doors for swift, streamlined, and modern shopping solutions for busy individuals, this continuously burgeoning type of business has also yielded many new possible consequences on both a local and national scale. As businesses invest valuable resources in becoming thoroughly modernized and ahead of the competition, they run the risks of many thoroughly modern issues, including human job loss due to automation, environmental fallout, wasteful practices, and other long-lasting effects.
Though companies are beginning to consider the long-term effects of their practices, great effort must be placed on setting an example for future generations of globalized e-commerce, and resources need to be allocated for maintaining sustainable, inclusive, and environmentally friendly business practices. With China’s population of over 1.4 billion people, it is safe to say that China’s e-commerce is largely significant within the realm of the global retail atmosphere and changes within China-based companies will amount to a formidable trend on a worldwide scale.
Dubbed “China’s Amazon,” e-commerce juggernaut JD.com has recently re-committed its operational practices to include total transparency regarding sustainable practices and environmental care. Helmed by CEO and founder Liu Qiangdong, JD.com began in traditional brick-and-mortar format prior to China’s SARS epidemic. At the time of the outbreak, Liu was already operating a dozen retail outposts of his operation and successfully scaling his business venture. Parlaying his previous knowledge into an e-commerce model post-SARS, Liu garnered success with his user-friendly shopping platform, which eventually became known as JD.com. With continued growth, impressive partnerships, and continually innovative tech at the forefront of the company, Liu scaled the operations to become a global e-commerce giant. Throughout this time of tremendous growth, the company’s same-day and next-day shipping options garnered extreme popularity, amassing over 300 million regular users and delivering countless packages to a population of over one billion customers.
Of course, with manufacturing, warehousing, and shipping practices on such a vast scale, the minds behind JD.com continued to reflect on the environmental impact of these operations. While many companies vaguely create plans to make unmentioned changes and whisper softly about transparency, JD.com has remained at the forefront of publicly declaring its commitment to issues of sustainability, inclusivity, and environmental impact. Recently, the company published its annual Corporate Social Responsibility Report, which explained its thorough involvement in various plans to achieve sustainable practices and add value to societal practices. Leading by example, JD.com not only spelled out concrete ways in which it will align its own operations with these goals in mind but also outlined ways in which the general public can help with its goals on a micro-level, starting at home.
Reducing the Environmental Footprint
To maintain long-term sustainability, JD.com understands the need to implement an extensive overhaul of current procedures, infrastructure, and even various physical components of its operation. With long-term impact in mind, Liu understands the need to create an environmentally friendly operation, which will reduce the company’s environmental footprint immediately and on a long-term basis. For example, the company has created and integrated a solar photovoltaic (PV) power generation system on the roof of its Shanghai Asia No. 1 logistics center. In June of 2018, the system began operating and remains one of the first effectively completed changes in JD.com’s extensive plan to reduce its carbon emissions, part of limiting its overall environmental footprint. With this ambitious initial task already in motion, JD.com expresses lofty goals in terms of long-term increase of solar power reliance. By 2030, JD.com is on track to operate the world’s largest ecosystem of rooftop photovoltaic power, with an area of more than 200 million square meters (over 77 square miles). By joining forces with other industry giants, Liu recognizes that this venture would not only create immediate positive effects for his company but would also set the international standard for environmentally friendlier operations.
Within its daily operations, JD.com utilizes a large fleet of multi-purpose vehicles. Thus, environmentally friendly transportation services are crucial on its list of operational musts. Currently, JD.com is in the early stages of deploying more than 5,000 “new energy” vehicles throughout China. Within the scope of these “new energy” vehicles are units that run on renewable fuel or alternative powertrain, including all-electric, hybrid, and hydrogen-powered vehicles. From electric vans and solar-powered tricycles to hydrogen-powered delivery trucks that emit only water, the lineup of “new energy” vehicles utilized by JD.com allows the company to test which vehicles meet its operational needs, while maintaining environmental responsibility. Of course, this introductory upgrade of vehicles is merely the beginning for JD.com. Within two years, the company’s entire nationwide fleet of direct-sale delivery trucks will be classified as “new energy,” making the company’s delivery practices highly sustainable and forward-thinking.
While JD.com’s main logistical focus is on how to move goods to customers swiftly and reliably, the actual manufacturing and packaging of goods plays as much of a role within the scope of environmental sustainability as the transportation devices that deliver these products. Last year, JD Logistics launched the Green Stream Initiative alongside various other industry peers and partners. The initiative aims to improve resource utilization and reduce emissions as a result of innovative technology. The company has launched a one billion RMB ($147 million) JD Logistics Green Fund to drive environmental innovation and promote more sustainable consumption. As part of this inclusive campaign, JD.com utilized 100,000 recyclable “green boxes” to deliver its products throughout the year. Made of lightweight thermoplastic resin, these reusable packages are made to withstand multiple trips between warehouses, delivery stations and customer doorsteps. Thus, by increasing their useful nature, the company believes these boxes will reduce paper use as a whole.
Empowering Local Communities and Customers
As many of its customers rely on JD.com not only for high-end and luxury products but also for lower-priced everyday essentials, JD.com recognizes the need for inclusivity within its hiring practices, stimulating the local economies that will ultimately shop for its products. Thus, JD.com has recruited over 25,000 employees from the poorest counties in China, propelling these small towns to financial independence and providing individuals from various backgrounds with the opportunity to engage in a large-scale business operation that helps promote upward mobility.
While many local e-commerce competitors were unable to offer shipping to some remote villages, JD.com recognized the value of being more inclusive, garnering the world’s largest fleet of drones utilized for delivery that are capable of successfully completing next-day delivery requests, even to the most remote of villages. This helped JD.com build a loyal following of customers in remote areas who relied on the company’s shipping services and standardized pricing for more of their daily needs. In this way, the company developed a trustworthy, long-term relationship with customers who were previously neglected as potential consumers.
In an attempt to stimulate rural economies full of eager workers with no means of traveling to larger cities to apply for positions, JD.com employees traveled around the country to numerous villages to recruit local workers. By setting up various job fairs and opportunities for potential employees to come face-to-face with employers, they offered new possibilities for these residents. “By providing jobs in these rural areas, where opportunities are few and often revolve around subsistence agriculture, we have helped improve the lives of many and helped lift thousands of families out of poverty,” said a company spokesperson regarding JD.com recruitment activities.
Throughout remote villages, JD.com offers employees various positions across many platforms. Within local warehouses and along various delivery routes, there are newly created positions in delivery distribution, warehousing, and customer service. At an average salary of over 6,000 RMB (approx. $900) per month, this income more than doubles the average pay rate of most of the non-JD.com employees in these rural regions of China. Of course, along with the stabilization of the families who reside in these areas, this increased cash flow also benefits neighbors, other local small businesses, and the local services purchased from funds paid out by JD.com’s rural employees.
As JD.com serves various small communities, the company also creates new channels for local goods, handmade by rural artisans, to be sold on JD.com’s powerful platform. Over three million products sourced from these rural villages are offered online and have already reached sales volumes of 20 billion RMB ($3 million), benefiting more than 300,000 people. These products are featured throughout JD.com’s 188 local specialty “malls” on its platform, which benefit 90 percent of the poorest counties in China. In an effort to promote the startup culture for youth, JD.com has established over 100 e-commerce incubators for young entrepreneurs, where young people can pursue their entrepreneurial passions on a global scale.
JD Giving Platform
As Liu and his team have made significant strides toward assisting local communities, as well as environmental sustainability, they also urge their customers to follow suit, creating a culture of giving. In the spirit of consumer ease-of-use, JD.com has built an online donation platform to provide integrated support to various charities, fully streamlined in a manner consistent with its own e-commerce platform. Not only are charities able to utilize the platform to raise funds, but they can also benefit from utilizing JD.com’s impressive portfolio of business connections, infrastructure knowledge, and overwhelmingly positive reputation among the global community. Each charity partner retains the ability to leverage the company’s extensive supply and distribution network, customer service, and technical support to ensure a fruitful operation.
“Success is unsustainable if a company offers no additional value to the society,” said Liu in his message to the stakeholders. “JD does this by creating an ecosystem in which every part of our footprint, from the creation of a product, to its packaging, sale and delivery, is executed with the expectation that our impact on society and the environment will always be positive.”
As a company that has garnered global success and a worldwide positive reputation as a leader in the e-commerce industry, JD.com is a juggernaut in the world of business. At the same time, as a company that values long-term sustainability, JD.com is proactively working to set an example for peers and business leaders of future generations. With such transparency and grand plans that have already begun their accelerated trajectories, JD.com will certainly stand out as a leader in maintaining inclusivity and responsible business practices.