IEKView：Circular Economy Brings Forth Business Opportunities in the Basic Necessities Industries
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The global reserves of natural resources, raw materials and minerals are being depleted through incessant mining. In addition, advances in manufacturing technologies are continually accelerating the popularity and convenience of consumer electronics products, which is driving an increase of the consumer population, raising consumption standards, changing consumption patterns, and in turn, causing the price of resources and raw materials to increase, resulting in higher business operating costs. In view of this, more and more companies are starting to make better use of the available limited resources to protect the environment and with the hope of creating a consumption pattern that is economical and convenient with an endless recycling of resources.
In fact, circular economy services are demand oriented, providing products or services to the right person, at the right place and the right time, in the right quantity and at the right cost, to conserve resources throughout the supply chain. Therefore, the focus of circular economy is to raise the transaction value on the right-to-use commodities, and design profit models for these products or services, such as: sharing, leasing, and on-demand, to facilitate the reuse, recirculation, remanufacturing, and re-utilization of products, so as to maximize the utilization of these resources.
Among the range of emerging food-related products or services are leftovers sharing and edible tableware design:
1. Use of Leftovers: There are three models for using leftover food: redistribution, re-adding value, and reutilization. "Redistribution" refers to the collection of not-yet-served food from the production and processing phases, or retail facilities and homes, to be redistributed to those in need. This model is usually initiated by the public or social welfare groups, such as Food Banks and The People's Fridge. "Re-adding Value" refers to the re-making of leftover foods or imperfect fruits and vegetables in to new culinary products using professional techniques, such as the new concept restaurant in the Netherlands, Instock. "Re-utilization" refers to making compost or generating energy from expired foods or kitchen scraps.
2. Edible Tableware: In Taiwan, the amount of disposable tableware used each year can be as high as 59,000 metric tons, which comprises mostly paper, styrofoam and plastic. Business operators in Taiwan are making use of rice husks to produce tableware, such as "husk chopsticks". BAKEYS, in India, developed rice chopsticks and rice spoons, using millet, rice, flour and other natural food ingredients, in a variety of flavors, which can be eaten while consuming the meal.
Among clothing-related products are used clothes recycling and the re-utilization of other cloth materials:
1. Used Clothes Recycling: The trend of "fast fashion" facilitates a process where a large number of garments are quickly designed, manufactured, sold and then replaced with a new style. Many of the garments are just left in storage, creating waste. H&M is driving the materials processes of the upstream industrial chain with its used-clothes-recycling business model, and is changing the one-directional consumption pattern of mass production, consumption and disposal in the global apparel industry.
2. Organic Cotton Clothing Rental: the production of a pair of jeans consumes 7,000 liters of water, in addition to releasing nearly 3,000 chemical substances into the environment, causing even more pollution. The jeans production process of the Dutch manufacturer, Mud Jeans, uses 25% recycled fabric and 75% organic cotton, and with careful product inspection and chemical tracking, it has re-designed the manufacturing process of new jeans. Additionally, to help ensure that they remain the owner of the original organic cotton raw material, the company has launched a lease-a-jeans service. Consumers can lease a pair of jeans for one year then choose to keep them or return them and lease a new pair. Depending on the condition of the returned product, Mud Jeans may repair, reproduce or recycle the jeans.
Regarding home-related products, there are underused living space facilities, plus the maintenance of the surrounding environments:
1. Idle Space Sharing Platforms: Through the use of a mobile App, Airbnb connects apartment owners and travelers. The service is available in 191 countries, 65,000 cities, and it has already served about 3 million owners and 160 million guests. Using machine learning technology, the smart pricing tool, Aerosolve, was introduced to dynamically calculate the profitability for the landlord and then make maximum pricing recommendations that guests will accept. Room rates are updated everyday, and the occupancy rate has quadrupled since Aerosolve’s introduction.
2. Home Appliances and Office Equipment Leasing: Bundles, a company in the Netherlands, provides a "monthly laundry service with a washing machine attached", offering washing machines with free in-home installation, while using smart plugs to monitor the usage frequency and status of the washing machine as a basis for calculating rental rates, in addition to providing maintenance and plans for eventual machine scrapping.
3. Smart Waste Management System Services: The BigBelly Solar company in the United States developed intelligent solar rubbish-compacting bins that have smart image-sensing and monitoring with interactive feedback functions, which can automatically detect cigarette butts and then guide the smokers to dispose of their cigarette butts in the device’s ashtray.
There are also mobile devices and transport systems:
1. Mobile Device Inspection and Secondhand Cell Phone Services: The iDea Mobile Tech Inc. in Taiwan developed a "Phone Doctor" App that can detect and inspect 34 internal/external cell phone hardware features and report their status in just 8 minutes, including touch-screens and sensors. The APP enables users to regularly monitor the hardware status of their cell phone, so that problems may be immediately identified, and the hardware can be replaced before the warranty expires.
2. Transport Sharing Platform: This helps to make full use of idle vehicles and vacant seats in order to use vehicles more efficiently, thus reducing carbon emissions and traffic flow. It also offers solutions to some of the problems of urban transport operations, including functions such as: vehicle sharing, transportation for people with special needs, locating parking spaces and smart self-service renting.
To be a circular economy-based service, an enterprise must abandon the ideas of low-cost mass production, and rethink its business paradigm from the perspectives of demand orientation and the resources of the entire supply-and-demand chain, so as to provide the on-demand supply of the right products or services. The key to creating new service value is to raise the transaction value for the right to use the commodities, and design profit models for these products or services, such as: sharing , leasing and on-demand, to facilitate product reuse, recirculation, remanufacture, and re-utilization.