A Green Partner for the Environment
ESG
Green Shopping Program
Following the development of e-commerce technology, the popularization of online shopping has significantly changed consumption patterns in the market and changed they way consumers go shopping. Impacted by the COVID-19 pandemic in 2022, people nowadays rely more on online shopping, which as contributed to the robust development of e-commerce. In 2022, PChome delivered more than 13 million products. To reduce the environmental impacts of e-commerce, PChome launched the Green Shopping Program in 2019, which covers four initiatives for standard improvement – green packaging, green transportation, green warehousing, and green payment. We continue to link together suppliers and consumers through cooperation and innovation, and jointly create a sustainable value chain for online shopping.
Green Packaging
Stable packaging is a matter of utmost importance in online shopping services, and ensures that products are safely delivered into the hands of consumers without any damage. In light of the need to consume a significant amount of single-use packaging in traditional online shopping, as well as driven by our goal to realize eco-friendly management and maintain the sustainability of forest resources, PChome has adopted four strategies for packaging improvement: implementing recyclable packaging, comprehensively using boxes made from recycled pulp for delivery, reducing the use of single-use packaging, and selectively switching to recyclable cushioning. We are working with manufacturers of packaging materials in designing and developing more sustainable green packaging materials. In 2019, we designed 31 new types of eco-friendly paper boxes to effectively reduce the environmental impacts of packaging used in online shopping. PChome’s eco-friendly boxes boast the following features:
- Made from 100% recycled paper, thus effectively reducing the need to log trees
- The high-density paper increases the reuse rate and lowers carbon emissions
- The boxes maintain the original color of the pulp and the printed area has been reduced by 50%, thus reducing ink use
- The ink printed on small external areas of the boxes is made from RoHS compliant, eco-friendly, and water-soluble ink
PChome uses uncolored eco-friendly boxes, which generates less carbon emissions compared to conventional paper boxes. All delivery boxes are made from 100% recycled pulp, which reduces emissions per kilogram of paper boxes by 5.29kg CO2 e (Note 1). This has reduced carbon emissions by over 60,000 metric tons as of the end of 2022, equal to 155x the carbon absorption of Da’an Forest Park in a year (Note 2). Besides comprehensively using eco-friendly boxes, PChome also continues to optimize the design of auxiliary materials, and introduced the easy-to-tear tape to use with eco-friendly boxes in 2020. The tape is made of hydrophilic acrylic and eco-friendly adhesive, making it eco-friendly, safe, easy to tear, RoHS compliant, US FDAapproved, non-toxic, and can be used directly on food. Consumers can swiftly remove the tape when recycling boxes and the tape itself does not leave any residual adhesive, thus effectively conveying the 100% recyclable concept of the box and showcasing our eco-friendly measures. (Note 1: Referenced statistics of Longchen Paper & Packaging Co., Ltd. and Taiwan Paper Industry Association, Note 2: calculated based on the annual carbon absorption of Da’an Forest Park of approximately 389 metric tons)
In 2019, PChome responded to the E-Shopping Packaging Reduction Program launched by the EPA and autonomously submitted a packaging reduction action plan aimed at the three main goals of reducing packaging, introducing eco-friendly materials and recycling packages. PChome was awarded the Online Shopping Packaging Reduction Seal by the EPA, recognizing the goal achievement progress of PChome. In 2023, the EPA is about to implement restrictions on targets of usage and implementation methods for online shopping packaging and will require at least 90% of recycled materials for online shopping packaging boxes and 25% of recycled materials for plastic packaging, while prohibiting the use of PVC. PChome is among the first to launch corresponding measures and use paper boxes made of 100% recycled paper, which exceeds the requirements. In the future, PChome will continue optimizing the average weight reduction ratio for packaging materials and become a role model for online shopping companies in order to effectively reduce packaging from the source.
In addition, PChome further introduced AI and implemented the two strategies of commingling products from different warehouses and developing a box number recommender system to improve the efficiency of overall packaging utilization. This means that when multiple products from different warehouses need to be shipped, the products in an order are collectively gathered without affecting the 24-hour delivery operations, and at no additional cost, and a box number recommender system is implemented in our warehouses. The minimum number of boxes to be shipped as well as the optimum box size are determined through big data, so as to achieve box and packaging use reduction. The load factor of a logistics vehicle can be increased through efficient box space utilization, thus increasing shipping efficiency and reducing the carbon footprint of each delivery.
Assisted with AI computing, consumers will receive size-appropriate packaging boxes for the products. Based on our own estimations, compared to manual judgment in the past, the smart box number recommender system is projected to reduce the number of boxes used per month by 5%. The boxes are estimated to save more than NT$1.3 million in packaging and logistics per year. Since its official launch in September 2021, the accuracy of the box number recommender system has reached 54.7% in 2022. In the future, we will continue optimizing the accuracy and combine the requirements of the EPA program to incorporate the weight reduction goals of packaging into the smart box number recommender system to reduce the usage of packaging materials and packaging waste from online shopping.
Advocating the Use of Eco-friendly Recyclable Delivery Boxes with a New Start-up, PackAge+
As a continuation of our efforts in EPA policy compliance in 2020, PChome launched a trial program on the use of a small-sized cooler bag to reduce single-use packaging waste from online shopping. In 2021, we took one step further and joined hands with an innovative eco-friendly start-up, PackAge+, thus upgrading our previous trial program on online shopping packaging optimization. PChome 24h Shopping is currently implementing a trial program in the cities of Taipei and New Taipei in which consumers who choose to collect their deliveries at convenience stores can opt for eco-friendly boxes at checkout. After receiving their packages, consumers can return the boxes to PackAge+’s cooperating merchants. The PackAge+ recyclable box is made of stain-resistant and crash-proof eco-friendly material and can be used more than 30 times. The boxes are disinfected thoroughly upon return, before being offered to the next customer.
Green Logistics
Using E-scooters
In response to the expansion of our logistics operations, PChome established a reliable solution for long- and short-distance transportation by founding a wholly owned subsidiary logistics company in 2018, PChome Express Co., Ltd., and was the first e-commerce platform to venture into last mile logistics. We continue enhancing our warehousing and delivery services. The PChome logistics team uses vehicles such as trucks and scooters. In response to the Green Shopping Program launched in 2020, we have actively reformed our fleet and started the transformation towards green transportation. So far, we have procured 13 e-scooters which form the PChome Green e-Scooter Fleet. Districts of Taipei and New Taipei with high population and delivery densities are covered by our e-scooters in the initial phase to reduce the fuel consumption and indirect carbon emission generated from logistics. Each e-scooter is estimated to reduce 1.33 metric tons of carbon emission per year, while the Green e-Scooter Fleet is estimated to reduce emissions by a total of 17.29 metric tons CO2e per year. Going forward, we shall mainly procure e-scooters and gradually phase out our gas-powered scooters based on their service life. We expect to obtain more e-scooters in 2023 and, in the future, reduce emissions by 6.65 metric tons CO2
e per year. The goal is to achieve a fully e-scooter fleet by the end of 2023.
In addition, our current general logistics management strategy is to require unit supervisors to manually inspect for abnormal fuel consumption rates in each scooter. Defective scooters, those with poor transmission lines, and high idle speeds are corrected to reduce the idling rate of our logistics fleet. Strategies for delivery time optimization are also proposed to improve the delivery efficiency in last mile logistics. Other than our own logistics fleet, PChome also realizes the carbon management guidelines in our suppliers and prioritizes logistics companies with green transportation as our partners while encouraging the existing logistics companies to expand their green fleets. In 2023, our partner logistics companies are expected to add 18 e-scooters.
Green Warehousing
PChome continually improves the efficiency in shipping operations to reduce environ-mental footprints in warehousing. PChome has been replacing incandescent light bulbs installed across 23 hectares of warehouse space with LED lighting. To date, LED lighting has been installed in 90% of our warehouse areas, which translates to a 50-70% drop in energy consumption and greatly increases the energy efficiency of the lighting system. PChome also actively optimizes the warehouse automation system. In 2019, we trans-formed our A7 Smart Logistics Center into an advanced automated warehouse that in-cludes shuttle racking systems and automated guided vehicles (AGVs). In addition, we ventured into automated processes such as order picking optimization, inventory pre-positioning, storage location allocation optimization, smart picking, and packaging optimization.
- Eliminating the need for lighting with a darkened warehouse
- Reducing overall manual labor by 30-35%
- Reducing manual labor for put-away and picking tasks by 50-60%, while maintaining the same order volume and achieving a work efficiency equivalent to manual warehousing
- Adopting a product-to-worker strategy to reduce the walking distance and the workload of put-away and picking tasks, thus increasing the reliability of the manual workforce
- Designating each worker to a specific workstation such that they would not know the next item that they need to pick before the current product arrives at their workstation, thus ensuring the safety of higher-priced products.
Linkou A7 Smart Logistics Center
Increasing developments in e-commerce have propelled its steady growth in the retail market. The diversification of products as well as mass orders pose a great challenge to outbound logistics. To this end, in 2019, PChome has already started to transform the Linkou A7 Smart Logistics Center into a smart warehouse system that combines automation and AI technology. PChome expects to unify all warehouses currently scattered around Taoyuan with A7. This large-scale expansion would increase the efficiency and quality of logistics and provide consumers with a superior shopping experience in order to expand clientele. The centralized management, on the other hand, would effectively control the costs for logistics. The Linkou A7 Smart Logistics Center is located in a designated industrial development zone near Station A7 on the Taoyuan Mass Rapid Transit System. The warehouse is developed by Chunghwa Post and has an area of around 45,000 ping and serves as an integrated logistics center comprising four main warehouse floors. In addition, it has been transformed into an advanced automated warehouse that includes shuttle racking systems and automated guided vehicles (AGVs). With the assistance of automated equipment, the previous worker-to-product work module has been changed to product-to-worker, along with the automated goods yard, logistics boxes for products from different sections are gathered and sent to the packaging yard for packaging. The system would recommend the best box number and materials for packaging. Increasing efficiency and reducing the usage of packaging materials helps achieve energy saving and carbon reduction. The current overall number of processed packages per day is expected to be more than doubled. Significant fluctuations in orders can also be effectively solved. Aided by Big Data analysis, orders can be optimized by geography and time with PChome’s own fleet and other logistics companies to deliver products to consumers more effectively. The Linkou A7 Smart Logistics Center would be activated gradually by floor and by section starting from January 2023. It is the first logistics center that incorporates the highest density of AI smart technologies and fully automated warehouse equipment among the current e-commerce companies in Taiwan.
Artist’s impression of the smart logistics center (Source: Chunghwa Post)
Training Program for Nurturing Smart Logistics Talent
In view of the launch of the highly automated warehouse in the smart logistics center, and to prevent the replacement of the workforce stationed at the current warehouses, PChome has organized human resources transformation measures and training programs for the workforce so employees can successfully perform high-quality tasks without losing their positions as a result of automation. This will improve the process quality and stabilize the reliability of consumers’ shopping experiences. In addition, the workforce could switch to new tasks in which employees create innovative shopping experiences for consumers. The planned PChome training programs include but are not restricted to the following:
Green Payment
Digitization of Uniform Invoices
Traditional physical invoices need to consume a massive amount of paper and ink, and become waste after only one use. PChome took it upon itself to apply sustainable practices in consumers’ lives and developed a green e-commerce mode. In October 2005, PChome became the first e-commerce platform to digitize uniform invoices while also obtaining government approval. We actively encouraged consumers to embrace the use of digital invoices. In January 2018, we launched electronic invoices for business entities. Our digital invoice development goals are threefold: to increase the number of digital invoices issued to customers, reduce the number of physical invoices, and to fully adopt digital invoicing during vendor account checking. These measures in general help increase the popularization of digital invoices. This not only reduces the use of paper and ink and help preserve forests but also reduce the generation of waste. It also saves the time and costs for mailing physical invoices and energy consumption for transportation, thus effectively reducing unnecessary carbon emission. In 2022, electronic invoices accounted for 99.35% of all the invoices. All vendor invoices have been fully converted to PDF files for download, saving over 13.5 million physical invoices, which is equal to preventing 16.2 million trees from being cut down and would measure 2.7 times the height of Taipei 101 (at 509 meters) if piled up.
Paperless Electronic Tickets and the Establishment of the Electronic Book Section
As the popularization of cell phones significantly grows, the application of electronic tickets not only brings convenience to consumers but also helps with environmental protection. PChome is dedicated to promoting electronic tickets and has established an electronic ticket section, which shelved 4,954 products in 2022. After making purchases, consumers open electronic tickets in the electronic ticket folder and present the serial number, bar code, QRcode or certificate to designated vendors for redemption. In 2022, PChome sold a total of 746,746 electronic tickets, saving over 146,000 sheets of A4-sized papers, which is the equivalent of 1,055 kilograms of carbon dioxide emission.
In addition, PChome also established an electronic book section, and worked with the domestic platform Readmoo in the initial phase. In 2022, more than 110,000 electronic books were shelved. In 2023, PChome will work with KOBO, the biggest electronic book platform in the world, and expect to provide 1 million electronic books to meet user demands with a diverse selection. PChome provides diverse options of electronic products for consumers to download and use immediately after purchase. This not only reduces the usage of paper, logging of trees and usage of water resources but also saves packaging materials and reduces the environmental burden caused by logistics.
Paperless Administrative Process
PChome began actively promoting the internal use of electronic documents in 2021, and nearly 70% of approvals are now electronic. Besides reducing the usage of paper, this also expedites the approval process for invoices. As of 2022, 42,423 electronic approval forms have been used, a 5-fold increase compared with the previous year. On the other hand, PChome started to use electronic contracts with vendors in 2022. The original suppliers could directly receive their electronic contracts via the backstage system for signing, which not only reduces paper used for printing and usage of other resources but also allows suppliers to immediately grasp the progress through the transparent approval process. In 2022, 2,423 vendors had their electronic contracts approved in the vendor backstage system.
