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INSIGHTS / BRIGHT IDEAS

Huidu Environmental: Creating a circular economy to ease online retail's parcel waste woes

China · Aug 28, 2019· By Hua Nan

© Huidu Environmental

China's billion-dollar courier industry finds much-needed solution in Huidu's eco-friendly, low-cost boxes and smart recycling system

Amid rising environmental consciousness in China, a pair of logistics and supply chain industry veterans have come up with a novel system to recycle courier parcel packaging more effectively and sustainably.

China handles the most number of parcel deliveries in the world, with 50bn parcels sent in 2018 alone. That’s 40% of the global business, exceeding the total volume handled by Japan, the US and the EU combined. In 2016, China’s courier parcels consumed 17bn meters of tape, 8.2bn plastic bags and 46m tons of cardboard boxes, equivalent to timber from 72m trees.

Spotting the need for an economical circular economy in China to help mitigate the environmental burden of such staggering volumes of packaging waste, veteran logistics operator Chai Aina, supply chain specialist He Guanghui and PR expert Huang Xianfeng founded Huidu Environmental in August 2017.

The startup combines eco-friendly packaging with a large network of local recycling services that makes it easy for consumers to participate. This creates a smart sustainable model that also helps logistics companies cut costs and revamp courier services to meet global environmental standards.

With seed funding of RMB 10m in 2017 and Series A funding of nearly RMB 100m in January 2019, Huidu is fast expanding nationwide. China Post EMS, e-commerce giants JD.com and Suning and two of China's top five logistics companies YTO Express and STO Express are now all using Huidu's green boxes.

Building recycling eco-systems

Reusing courier parcel packaging is not new. E-commerce giants Alibaba and JD.com, and leading delivery services companies like SF Express, have already begun using more eco-friendly packing materials. But Huidu seeks to optimize the whole recycling process. The biggest difficulty for many companies is the management of the recycling operations network and recycling processes.

“There's a primary difference between green, recyclable boxes and traditional packages. In the past, we throw them away after one-off use. Now we have to return them after rent and use,” said the company's CEO Zou Tao, an e-commerce veteran. Huidu's rent business model means that customers are responsible for returning the boxes after use.

With 2m Huidu boxes already circulating in the market, it’s a huge challenge to ensure that the recycling system works sustainably. A Huidu subsidiary manages the logistics for the recycling process. It has 19 operations centers nationwide to focus on box recycling, reaching out to remote areas like Xinjiang, Tibet and Hainan. Huidu also cooperates with other logistics companies to regularly visit the customers to collect the empty boxes.

In April 2018, a smart recycling locker program Polanwang was launched to recycle Huidu boxes, conventional delivery boxes and batteries. The company also plans to expand its recycling facilities to cover local communities, business districts and convenience stores. This will make it easier for more individuals and small businesses to participate in the collection and return of recyclable packages and other renewable materials.

Reusable, convenient and cost-saving

The Shanghai-based Huidu splits the recycling services into three types. For the face-to-face deliveries such as food and drinks, the deliverymen will bring the boxes back directly after the deliveries. For the deliveries to lockers, the boxes are left behind to allow recipients to get the goods later. Customer guidance notes are also printed on the boxes to remind the recipients to leave the empty boxes in the lockers for collection by the delivery companies.

For the deliveries that need recipients to check and sign later, the recipients may choose to recycle the box when placing their next orders. Huidu will label those boxes to inform the couriers to collect the boxes when delivering the next order. The deliverymen will be given a monetary bonus if they use these boxes to deliver and return.

To popularize the use of the green logistics boxes, Huidu has come up with reusable, durable, convenient and cost-saving boxes. Huidu has patented three kinds of boxes: ZerO Box for electronics, clothes and other consumer goods; Cool Box with food-grade inner membrane for fresh food and waterproof ZerO Bag for files and documents.

The boxes have a locking design that is self-sealing without using any tape or glue. They are made of non-toxic polypropylene that can be recycled and melted in a furnace for secondary use. Records show that the boxes currently used in the market can last for four to seven months on average, with some lasting for one year and even reused for over 80 times.

Degradable boxes have existed in the market for many years but are not widely used because of the high cost, about 510 times more than that of conventional cardboard boxes. However, the high reuse rate of each box will reduce the cost per use by 30%, making it a great money-saver after the price hikes of cardboard boxes in recent years.

Edited by Suzanne Soh