Chapter 2

Review of Related Literature/System

Related Literature

This literature review brings together findings from various studies on challenges in the online shopping industry, particularly regarding environmental sustainability, order cancellations, and product defects. Research indicates a significant rise in packaging waste, especially bubble wrap, stemming from online shopping practices and free return policies. According to Yang (2022), ecommerce businesses face challenges in managing post-consumer packaging waste under Extended Producer Responsibility (EPR) regulations, highlighting the need for improved waste management strategies and acknowledgment of the role of online platforms in sustainability efforts.

Studies in Taiwan show that news consumption positively impacts consumers' intentions to use circular packaging in online shopping, with green habits playing a key role in promoting sustainable behavior (Lee, 2022). In the Philippines, the rise of online shopping during the pandemic has significantly contributed to the accumulation of plastic bubble wrap waste, threatening the environment, especially bodies of water like Laguna Lake and Manila Bay. The study emphasizes the need to adopt sustainable packaging alternatives (Campos, 2022). Although extensive research, significant gaps remain. One such gap is the lack of attention to innovative strategies that address the underlying causes of order cancellations in e-commerce. Studies, such as those conducted in China and Vietnam, focus on pricing, service optimization, and risk factors but often overlook the consumer's psychological drivers behind cancellations and their impact on service improvement (Tan et al., 2023; Nguyen, 2024). This indicates a need for further exploration of how better engagement strategies can reduce cancellations and enhance customer satisfaction in e-commerce platforms.

Increased bubble wrap waste in online shopping.

Increased bubble wrap waste due to online shopping is a growing concern globally. This issue arises from the surge in ecommerce, particularly during the COVID-19 pandemic, which led to excessive use of plastic packaging materials like bubble wrap. In Canada, the rise in packaging waste from online shopping, exacerbated by free return policies, poses challenges for effective management under Extended Producer Responsibility (EPR) regulations. The study emphasizes the need for e-commerce businesses to enhance their packaging waste management practices, suggesting that hybrid business models may be more successful in sustainability efforts (Yang,2022).

Similarly, in India, the COVID-19 pandemic significantly increased e-commerce packaging waste, leading to heightened awareness of resource utilization and carbon emissions. The study aims to analyze post-pandemic consumer trends while proposing a circular model to reduce the demand for virgin packaging. Findings indicate that households predominantly discard packaging waste rather than recycle it, highlighting the necessity for practical solutions to minimize virgin packaging production and enhance reuse models (Arora et al., 2023).

In Taiwan, research focuses on consumer acceptance of circular packaging in online shopping, revealing that news consumption positively influences environmental attitudes and intentions towards sustainable practices. The study suggests that cultivating green habits among consumers can significantly promote the adoption of circular packaging, indicating a potential pathway for reducing waste in e-commerce (Lee, 2022). In Malaysia, the issue of e-commerce packaging waste centers on consumers’ recycling behaviors and awareness of environmental impacts. The findings reveal that many online shoppers lack awareness regarding the consequences of their packaging waste, urging improvements in recycling infrastructure and consumer education to foster sustainability (Mokhtar & Shamsuddin, 2024).

In the Philippines, studies show that the rise in online shopping has led to increased plastic waste, particularly from non- reusable bubble wrap. This phenomenon poses environmental risks, particularly to local waterways. Recommendations include reducing reliance on bubble wrap and adopting sustainable packaging options, emphasizing the urgent need for action to address the mounting plastic waste problem (Campos, 2022).

Comparative findings indicate that excessive packaging waste from online shopping is a shared concern across regions, driven by factors such as consumer behavior, lack of awareness, and inadequate waste management practices. While Canada and India emphasize sustainable business models and circular solutions, Malaysia and the Philippines highlight the critical need for consumer education and improved recycling infrastructure. These insights inform the proposed capstone project aimed at addressing packaging waste through sustainable practices and consumer engagement strategies, ultimately promoting an eco-friendlier ecommerce landscape.

High volume of order cancellation from the customer.

Order cancellations during live streaming e-commerce are a growing concern in China. A study on TikTok found that anchors' emotions, conveyed through body language, facial expressions, and voice, significantly affect viewers' emotions, leading to instant order cancellations. Emotional contagion plays a key role in this behavior, where viewers mirror the anchor's emotions. Managing these emotional cues is crucial for reducing cancellations (Wang et al., 2024).

In Turkey, e-commerce order cancellations pose a significant threat to revenue. A study proposed a predictive model using machine learning algorithms like Random Forest, achieving 86% accuracy and 88% F1-Score. Identifying key factors influencing cancellations helps improve inventory management and customer engagement. This model serves as a tool for mitigating revenue loss (Şahinbaş, 2022). In China, fresh produce e-commerce is impacted by order cancellations, which influence pricing and value-added services. A study developed an analytic model that optimizes service decisions and found that revenue-cost-sharing contracts can boost profits in decentralized channels (Tan et al., 2023).

In the ASEAN region, Vietnam faces significant challenges in online shopping due to perceived risks like non-delivery, comfort, and product risks, which lead to order cancellations. A study found that these risks reduce consumer spending, while financial risk and return policies had little effect (Nguyen, 2024). In Malaysia, the semiconductor industry struggles with high processing costs and excess obligations from canceled purchase orders. Solutions such as restricting manual orders and better monitoring open orders were proposed to address these issues and reduce costs (Nijman, 2021).

In the Philippines, unreliable delivery timelines often result from poor communication and a lack of accountability among delivery services. A study revealed that unjust cancellations of food and grocery orders create financial and emotional strain for delivery riders (Mercado, 2020). In response, legislation has been proposed to impose penalties on customers who cancel confirmed orders without valid reasons, aiming to protect delivery drivers and ensure better verification processes (Gonzales, 2020). Additionally, the furniture export sector is suffering from increasing order cancellations due to recession fears in major markets, highlighting the need for support to meet international standards and access new markets (Monzon, 2022).

Analyzing the results across various regions, the challenge of order cancellations is prominent in e-commerce markets in China, Turkey, ASEAN region and the Philippines. Factors such as emotional contagion during live streaming, perceived risks associated with online shopping, and poor communication significantly contribute to high cancellation rates. Proposed solutions include leveraging predictive models to identify key cancellation drivers, optimizing service decisions in fresh produce e-commerce, and implementing legislative measures to protect delivery drivers from unjust cancellations. By addressing these issues, the strategies aim to enhance customer engagement, streamline operations, and ultimately improve satisfaction across the affected regions.

Increasing defective items received by customers.

Increasing defective items received by customers is a significant challenge in global supply chains. A study in China reveals that integrating local reworking of defective items with multi-period delay-in-payment policies can enhance profit margins. The findings emphasize that optimizing these strategies improves inventory management and overall supply chain efficiency (Ahmed et al., 2021).

In Bangladesh, managing the quality and deterioration of agricultural products is a critical issue due to factors like handling and weather conditions. A study focuses on developing an inventory model that addresses these challenges by optimizing pricing and replenishment strategies for perishable goods, particularly fruits. The findings indicate that offering discounts on near-defective items can significantly enhance overall profits compared to maintaining standard pricing. This approach highlights the importance of effectively managing inventory to minimize losses from product deterioration (Hasan et al., 2021).

In the ASEAN region, consumer rights concerning defective electronic products are often inadequately protected, particularly in Indonesia and Thailand. In Indonesia, legal frameworks exist to hold sellers accountable for defective goods, but consumers may still lack awareness of their rights (Arief et al., 2023). Similarly, Thailand faces significant restrictions on consumers' right to repair, limiting access to spare parts and information, which compels consumers to rely on authorized service providers (Kururatchaikul & Nanakorn, 2021). This lack of transparency and access to information creates a challenging environment for consumers, making it essential to advocate for stronger consumer protection regulations across the region.

In the Philippines, e-commerce sustainability is a pressing issue, particularly regarding the adoption of green logistics practices among online sellers. A study assessing the readiness for sustainable logistics highlighted a positive correlation between technological integration and environmental sustainability, emphasizing the need for online sellers to embrace eco-friendly practices (Jou et al., 2024). Additionally, research on the economic effects of a truck ban in Manila revealed unintended consequences, such as increased port congestion and significant economic losses, underscoring the need for careful policy analysis (Llanto, 2020). Furthermore, factors influencing property damage recovery times after extreme flooding in Metro Manila were identified, demonstrating the importance of community support and disaster preparedness in recovery efforts (Francisco, 2020).

Reviewing the challenges across regions, it is clear that the issue of increasing defective items poses significant challenges. In China, integrating local reworking of defective items with strategic payment policies can enhance profit margins and improve supply chain efficiency (Ahmed et al., 2021). Meanwhile, in Bangladesh, developing inventory models that optimize pricing and discount strategies for near-defective agricultural products can significantly minimize losses (Hasan et al., 2021). In the ASEAN region, inadequate consumer rights protection, particularly in Indonesia and Thailand, highlights the need for greater transparency and stronger regulations to support consumers dealing with defective electronic products (Arief et al., 2023; Kururatchaikul & Nanakorn, 2021).

Related Systems

Increased bubble wrap waste in online shopping.

One existing solution addressing bubble wrap waste in online shopping is Shopee, developed by Sea Group and launched in Queenstown, Singapore, in 2015. Shopee is a popular e-commerce platform that connects buyers and sellers through an intuitive website and mobile app. It utilizes a streamlined packaging system and encourages sellers to adopt eco-friendly practices. However, while it promotes sustainable packaging options, Shopee does not actively incentivize customers to return or recycle their used packaging materials, leaving a gap in its sustainability efforts. GREENCART aims to fill this gap by providing a practical solution for managing bubble wrap waste, encouraging users to collect and return their used bubble wrap in exchange for discounts, and actively engaging customers in the recycling process.

Similarly, TikTok, launched by ByteDance in 2017, has emerged as a platform for users to share short videos, including those related to online shopping. While TikTok has introduced features that allow users to shop directly through the app and discover ecofriendly products, it does not specifically address the issue of packaging waste or incentivize users to recycle their bubble wrap. Unlike GREENCART, which focuses on actively engaging customers in the recycling process, TikTok primarily serves as a marketing tool rather than a platform for sustainable practices. GREENCART seeks to leverage this gap by promoting a culture of recycling among online shoppers, encouraging them to return used bubble wrap for discounts.

High volume of order cancellation from the customer.

Shopee provides a user-friendly platform where buyers can easily browse, purchase, and manage their orders. It offers various features like order tracking and notifications, which aim to enhance the shopping experience. However, while Shopee allows customers to cancel orders, it does not implement specific strategies to minimize cancellations or address the reasons behind them. In contrast, GREENCART focuses on creating a more engaging shopping experience by incentivizing customers to manage their orders responsibly, thereby reducing cancellation rates and promoting sustainability.

On the other hand, TikTok has introduced shopping features that enable users to discover and purchase products through video content. However, it does not provide solutions to address high volumes of order cancellations. Unlike GREENCART, which actively engages customers with incentive programs to reduce cancellations, TikTok mainly serves as a promotional platform. GREENCART focuses on minimizing cancellations by promoting responsible ordering and offering rewards for packaging returns.

Increasing defective items received by customers.

One notable solution for defective items in online shopping is Lazada, founded in 2012 by Rocket Internet in Singapore. Lazada connects buyers and sellers through web and mobile platforms, offering return policies for defective products. However, it does not focus on preventing defects during shipping. In contrast, GREENCART emphasizes reducing defective deliveries by using protective materials like bubble wrap and carton packaging. GREENCART also encourages careful handling through a packaging return program, further minimizing product damage during transit.

Additionally, Shopee provides return policies, it does not fully address the inconvenience of returning defective items or prevent damage during shipping. In contrast, GREENCART focuses on preventing defective deliveries by using durable packaging materials like bubble wrap and carton, ensuring items are well protected. Furthermore, GREENCART’s return program incentivizes customers to handle packaging with care, minimizing the occurrence of damaged products and simplifying the return process for any defects.

While solutions like Shopee, Lazada, and TikTok offer various approaches to online shopping, including return policies and product discovery, they each have significant limitations in addressing defective items. Shopee provides return options but does not effectively alleviate the challenges customers face when returning defective products. Lazada connects buyers and sellers but lacks a proactive strategy for preventing shipping defects. In contrast, GREENCART aims to enhance product safety by utilizing protective packaging and promoting careful handling through a return program. By prioritizing these practices, GREENCART addresses the issue of defective items more comprehensively than existing solutions.