“We are not anti-union, but we are not neutral either. We do not believe unions are in the best interests of our customers, our shareholders and most importantly our associates. Our business model is built upon speed, innovation and customer obsession- things that are not generally not associated with unions.” This is directly quoted from a training video made by Amazon for their managers [1]. When companies with such predatory business strategies meet opportunities (?) like ongoing Covid-19, we ought to take a closer look and raise questions about customer & employee safety, the truth behind claimed sustainable value creation and what we can do for a restructured approach from a systemic perspective.
The rise of E-commences has taken away jobs from the brick and mortar retail stores and created similar number of jobs in warehousing industries. To understand the question of sustainability for this warehousing industries focusing on employees as an auxiliary variable and on a further degree how it affects everyone during this pandemic, at first, we have to take a deep dive on the prevailing practices in this industry. While companies like amazon make false advertises[2] (with comments turned off on youtube) to mislead everyone into believing their workplace environment is fun, safe and happy; meanwhile injury and illness rate in warehousing industry remains higher than industries like coal mining, construction and logging.[3] The New York Time’s article on the interviews from mothers victim of miscarriages due to pregnancy discrimination directly shows that the underlying reasons for their sufferings are not accidents; rather being victim of negligence, cruelty and being denied of basic human rights [4]. The XPO supervisors forced the workers to continue working while Ms. Neal’s dead body was lying on the floor. Ms. Neal was denied an extra break that day when she was feeling unwell.[4]
Now let’s look at the scenes behind the curtains what companies like amazon doing to protect their employees during this pandemic and whether their predatory policies have changed or reaching up to even the customers. In March 2020, Amazon stopped shipment of non-essential items, but just a month later when the coronavirus cases are devastating the world, they have again started to accept non-essential items into their warehouses.[5] For deep cleaning purposes many warehouses that were rented and managed by companies like Amazon were temporarily shut down when workers tested positive. But these initiatives are mostly taken after state orders.[6] Discontent starts to rise up among employees as Amazon fails to provide minimum protective measurements. In couple of warehouses protest started and people started to walk out. And the warehouse worker who planned and led the walkout for the sake of better protection was fired.[7] This is not an isolated case. By April, Amazon publicly terminated six workers as a method of retaliation for speaking out against the prevailing warehouse conditions citing the social distancing guidelines.[8] And has a final nail in the coffin, the unlimited unpaid leave policy is terminated. That essentially means even if someone still have coronavirus they are still expected to show up.[9] At least Walmart had the decency to pay second round of cash bonuses to its workers in June. Target has increased the hazard pay it was paying up to July. But the 2$ hazard pay Amazon decided to pay, they decided to terminate that as well.[10]
As a matter of personal reflection, we have to take into account the practices of companies solely relying on warehousing and being wary of the consumed products and question ourselves about the essentiality of them. Over the years we have ignored when Amazon has faced criticisms and lawsuits for refusing pregnant workers longer bathroom breaks or fewer continuous hours on their feet and firing them.[11] The more we look at these companies the more we realize the conveniences they offer comes with a real cost. We do not need to get to the shops to get the products, they are brought to us and somehow, they managed to make it cheaper. This has not been achieved with a clever algorithm rather siphoning the life force out of the people in the lowest level. And when these companies hit their all-time high stock prices [12] while considering the employees expendables we as consumers, activists and policymakers need to show solidarity to eradicate these predatory practices.
Amazon’s Union Busting Training Video
https://www.youtube.com/watch?v=AQeGBHxIyHw
Tour an Amazon warehouse. Amazing technology, amazing people.
https://www.youtube.com/watch?v=x-fyLCM_0Y4
U.S. Bureau of Labor Statistics- Injuries, Illness and Fatalities
https://www.bls.gov/iif/
Miscarrying at Work: The Physical Toll of Pregnancy Discrimination – The New York Times
https://www.nytimes.com/interactive/2018/10/21/business/pregnancy-discrimination-miscarriages.html
Amazon allows sellers to start shipping nonessential items again.
https://www.cnbc.com/2020/04/13/amazon-allows-sellers-to-start-shipping-non-essential-items-again.html
Amazon Closes Kentucky Warehouse After Workers Test Positive – NPR
https://www.npr.org/sections/coronavirus-live-updates/2020/03/26/822045229/amazon-closes-kentucky-warehouse-after-workers-test-positive
Amazon fires warehouse worker who led Staten Island warehouse walkout- CNN
https://edition.cnn.com/2020/03/30/tech/amazon-worker-fired-staten-island-warehouse/index.html
Fired Amazon worker says termination was retaliation for speaking out
https://www.cnet.com/news/fired-amazon-worker-says-termination-was-retaliation-for-speaking-out/
Amazon set to end ‘unlimited unpaid time off’ policy
https://www.businessinsider.com/amazon-set-to-end-unlimited-unpaid-time-off-policy-2020-4?op=1
Amazon says it will END hazard pay in June for its warehouse employees who received extra $2 an hour and double overtime during the pandemic
https://www.dailymail.co.uk/news/article-8320733/Amazon-says-END-hazard-pay-June-warehouse-employees-received-extra-2-hour.html
Amazon fired these 7 pregnant workers. Then came the lawsuits
https://www.cnet.com/features/amazon-fired-these-7-pregnant-workers-then-came-the-lawsuits/
Amazon stock hits a new all-time high as it sees unprecedented demand
https://www.cnbc.com/2020/04/14/amazon-stock-hits-a-new-all-time-high.html
One would think that Covid-19 had pretty much put the world in quarantine and basically stopped almost all activities, except for food distribution to and health care for the population.
But there are some people abusing this quarantine. The deforestation in the Amazon actually has not stopped or decreased, it has in fact increased. That seems illogical at first sight but the absence of the environmental agents patrolling and more economic hardship in rural areas, has actually led to a 64% increase of deforestation in April 2020 compared to the same month last year (1). The illegal loggers obviously were not in quarantine and the poor population was trying to generate some income even when it was only helping the illegal loggers.
According to Brazil’s National Space Research Institute (INPE) (2), which uses satellites to track deforestation, the chart below shows that starting a year ago, logging increased substantially over the previous 5 years and April 2020 was even worse than April 2019. The figure for May 2020 is as of 21st, therefore not for the entire month and therefore lower as last year’s figure for the full month.
The current government has been known it is not doing much to stop illegal logging. According to Ibama, the Brazilian Ministry for Environmental and Natural Resources, since October 2019 thousands of fines for illegal logging were suspended and only 5 were actually issued (3).
According to a video which was released last Friday, the environment minister, Ricardo Salles said in a ministerial meeting in April that “we need to make an effort while we are in a quiet moment for press coverage because they only talk about COVID” (4).
That does not bode well for the future of the world’s lung and could turn into a vicious circle where deforestation leads to more pandemics and during pandemics more deforestation will happen. Scientists have concluded that there is a link between wildlife and habitat destruction and viruses. According to the US Centers for Disease Control and Prevention (5), three-quarters of new diseases originate from animals driven from their natural into manmade environments.
Not only are we, the first world through our consumption and irresponsible lifestyle, indirectly responsible with help of the Brazilian government for the destruction of the primaeval forest and force animals closer to densely populated areas, but we also are destroying the thousands of known and undiscovered natural medicines hidden in the Amazon.
Brazil’s rainforest is the world’s biggest medicine cabinet with more than 80’000 kind of plants (6) 25% of all medicine we are using today, originate from there and many are promising to cure diseases like cancer (7). It is a paradox that we are possibly destroying a future cure for a future pandemic by our lifestyle and ignorance towards nature. I hope the quarantine gave us some time to rethink our life, our behaviour and our ignorance towards our mother earth. Let’s try to live more sustainable, more attentive, more compassionate, more responsibly. Our planet is the only one we have.
There are various reasons for choosing vegan milk instead of milk. There are different reasons why people choose vegan milk, such as low calories, lactose intolerance, and animal freedom. Recently, more people seem to choose vegan milk due to the problem of the factory-style livestock industry and environment that occurs during the milk production process. I think it is very meaningful to choose vegan milk for sustainable consumption.
If the value of “sustainability” is important in purchasing a product, there are so many things to consider. Until the release of various vegan milk on the market, the representative food that replaced milk was surely soy milk. I was always cautious when I bought soy milk. ‘Do you use GMO beans? (Domestic soybeans?) , do they include food additives?’ Because it’s natural to want to buy healthy products.
According to an analysis of a research paper by Oxford University’s research team, the land area, water consumption, and greenhouse gas emissions needed to produce vegan milk produce fewer resources and greenhouse gas emissions than conventional milk production.
In terms of greenhouse gas emissions and land-use areas, milk is ahead of vegan milk. With the exception of milk, the share of vegan milk is similar. But the water use sector was different. The amount of water used to produce almond milk seems to be quite high. It is only ‘green compared to milk’ but cannot be ignored by absolute figures. According to data on almond supply and water consumption, most of the articles were about California. It is an area that produces 80 percent of the world’s almonds. Excessive almond production is directly linked to the survival of honeybees as well as water shortage problems. Generally, honeybees are needed to grow almonds to hydrate the crops. The deal between beekeepers and almond orchards is concluded, and as the almond industry expands, the number of honeybees is also put in more to keep up with it. Although pesticides are used in all crops, almonds use 35 mlb a year, more absolute than other crops.
For the first time in 2006, a record number of bees disappeared or died. The main culprit is a type of insecticide called “neonics” that has had a fatal effect on bees. There are many chemicals that are not classified as toxic, even though they can make honeybees sick and weaken the immune system. This will prevent them from enduring the winter and exterminate the entire colony. Pesticides used in the cultivation of almonds have a fatal effect on the disease and death of honeybees.
source: ‘Like sending bees to war’: the deadly truth behind your almond milk obsession, The Guardian, Wed 8 Jan, 2020.
Even if it is not necessarily related to the almond industry, the threat of bees becoming extinct has been a much-debated issue. Honeybees play an important role in the symbiotic relationship between humans and nature as a medium for helping plants reproduce. Currently, honeybees are declining worldwide, and major causes include insecticide exposure, habitat loss, and climate change. The causes are also intertwined with each other, making it difficult to clarify the causal relationship. To solve these problems, almond orchard and manufacturing enterprises are working to develop sustainable farming methods, composting processes. However, consumers also need to keep an eye on such corporate efforts.
Recently, it refers to oat milk as the most eco-friendly vegan milk. As you can see in the graph above, the amount of water used to produce oat milk is much less than that of almond milk. It is not encouraging to drink oat milk, but it is more fundamentally important to recognize its production process and mechanism whatever it consumes. Also, choosing a product with a certification mark can be one of the solution. For example, Haagen-Dazs ice cream is producing products with Bee Better Seal. I think sustainable development is possible when we are always on the lookout for the negative effects that exist on the growth plane.
References:
“‘Like sending bees to war’: the deadly truth behind your almond milk obsession”, The Guardian, 8 Jan, 2020.
Greenwashing refers to campaigns and PR activities that put individual products, entire companies or political strategies in a “green” light, thus creating the impression that the players are acting in a particularly environmentally friendly, ethically correct and fair manner. Companies that engage in greenwashing present a green image in the eyes of buyers and the public and sell the consumer the label “ecologically valuable”. In the case of greenwashed products, however, this external appearance does not correspond to the ecological facts. In order to be able to do better public relations work and to increase the brand and company value, companies misuse the basic ideas of Corporate Social Responsibility (CSR), which are based on the motto “Do good and talk about it” and focus on sustainable business.
Why do companies do greenwashing?
The focus
is clearly on economic interests: instead of actually acting sustainably,
companies hope to achieve greater profits through greenwashing. There are
numerous instruments of greenwashing with which companies hope to gain an
advantage:
Better image: A green product has a better image, as a good conscience is sold along with it.
Higher price: An ecologically produced product justifies a higher price.
Weaker regulations: If it is made credible that certain standards are voluntarily adhered to by business, then policymakers may be more “generous” in regulating environmental values.
Stronger lobbying: Under the guise of sustainable business, companies receive greater political support – even though the same companies are unofficially active against climate protection regulations in the background.
7 sins of greenwashing
A study from 2010 has shown that greenwashing misdemeanours can be classified into 7 sin categories. These are by name:
Sin of the Hidden Trade-Off The sin of lazy compromise refers to the emphasis on some environmentally friendly product features in order to disguise other, more important and environmentally harmful product characteristics.
Sin of No Proof The sin of unverifiable statements refers to the specification of an environmentally friendly property without the possibility of proof.
Sin of Vagueness Unclear, fuzzy or ambiguous wording, which ultimately only confuses the consumer, should be avoided.
Sin of Irrelevance Irrelevante Aussagen betonen eine richtige, aber im Kontext nicht wesentliche Produkteigenschaft.
Sin of Lesser of Two Evils The highlighting of individual positive product characteristics in order to divert attention from more negative characteristics is obviously a form of misleading.
Sin of Fibbing The sin of false statements refers to the indication of environmentally friendly characteristics which are false.
Sin of Worshiping False Labels The use of unrecognized fantasy labels leads to even more confusion in the label jungle.
Popular example
Chiquita Logo
A well-known example of greenwashing is Chiquita. The company has become known for its greenwashing through heavy criticism in the media. Although the company has been talking about its environmentally friendly and fair trade for more than two decades, the plantation employees have repeatedly brought negative things to light: above-average salaries are very low and trade union rights are repeatedly disregarded. The media has also heard that employees who dare to resist such structures are immediately dismissed and do not get a job anywhere in the region.
Tips for the consumer
When buying fresh produce such as fruit and vegetables, preference should be given to local products. The same applies to seasonality: buying out of season leads to long transport routes – and encourages cheating on the sustainability of the products. When buying, the seal of approval should also be taken into account (it must be an official and not freely invented seal of approval). A critical approach to the advertising messages of companies is essential. One should always question the following? Does this company really do sustainable business, or do the figures in the environmental balance sheet only make the consumer believe that it is behaving sustainably? Is the supplier’s assertion, for example, that it produces tomatoes from purely organic cultivation, really credible? Ultimately, it is always best if everyone obtains independent information for themselves and form their own opinion.
In Bali, co-working spaces are packed with remote workers from abroad looking to make serious money— and to do so instantly. Through a business scheme called dropshipping, sellers can target prospective buyers via Facebook and Instagram ads with products they never see or store themselves.
By Hetty Sarinah Samosir 01 June 2020
Have you heard of a relatively modern form of lifestyle, the life of a digital nomad? Digital nomads are location-independent people and leverage technology to work remotely. The digital nomad lifestyle has been made attainable through low-cost Internet access through Wi-Fi, smartphones, and Voice-over-Internet Protocol (VoIP) to keep in touch with customers and employers. Digital nomads can be seen working all over the world. The locations of digital nomads include Bali’s co-working spaces in Indonesia, cafés in France, libraries in Argentina, beach huts in Thailand, net cafes in Tokyo, and office shares in Australia. Those who pursue a nomadic lifestyle tend to be younger people (Hayes, 2020).
A digital nomad working from his computer in front of rice fields in Bali Credit: Jorge Moya
However, in Bali, many people refer it to Silicon Bali, inside the coastal town’s co-working spaces, people are establishing business empires selling products they have never seen and handled, from countries they have never visited, to consumers they have never met. Welcome to the world of dropshipping (Kale, 2020). Dropshipping is a business model for a digital nomad and is a retail fulfillment method of selling products in which traders do not physically stock the products and never see those products themselves. Whereas a dropshipper essentially acts as an e-commerce middleman or retailer in a globalized supply chain. The dropshipping method possibly generates a higher profit per unit sold due to cost savings in which the supplier stocks those goods ordered, bears warehouse expenses and distribution expenses. Dropshipping differs from the traditional supply chain. In a conventional supply chain, retailers or middlemen purchase items from wholesalers or suppliers and stock items in their warehouse before sending them to buyers (Zając, 2014). For many digital nomads, conducting a dropshipping business from Bali is attractive because the town offers a very cheap living cost, beautiful beaches, nice weather with paradise ambiance, and good internet speed. Unfortunately, there are no official figures available that could determine the market value of the dropshipping industry conducted in Bali, Indonesia. However, the report by Deloitte University (2015) highlights that dropshipping is a huge business: an estimated 93 percent of Facebook’s $8 billion ad market, made up of over a million advertisers, is comprised of retailers selling by dropshipping.
Digital nomad working from his hammock on the beach in Bali Credit: Olezzo
People do this lucrative business scheme mainly through the Chinese e-commerce platform, AliExpress. As AliExpress offers free shipping worldwide, in this way, dropshippers are confident they can sell the goods to European or American customers. Dropshippers then establish a website utilizing Shopify. To identify and target customers dropshippers typically employ Facebook ads. Dropshippers can also be found on other platforms, including Instagram, or selling through marketplaces such as online homeware store Wayfair (Kale, 2020). If your social media accounts, including Instagram and Facebook, happen to receive ads of a product that you can also find on the AliExpress e-commerce website, this means that someone is trying to advertise their dropshipping businesses to you.
Successful dropshippers often solve so-called “pain points” as defined in marketing as the needs, wishes, or worries (real or perceived) of consumers through products they offer. Here is a sample of how the dropshipping scheme might look. Perhaps in the era of pandemic COVID-19, people need to wash hands more frequently, however finding pressing the soap dispenser a chore. Dropshippers spot the consumer pain and find a hand-free soap dispenser on AliExpress. They then do marketing via Facebook. They will make a video demonstrating its benefits (videos exceed description). Dropshippers then frequently advertise goods, haunt customers on social media with that video aimed to influence customer decisions until the customers finally purchase those dispensers. When customers then place an order, the dropshipper purchases the item through AliExpress and ships it directly to buyers. At this point, customers will wait up to a month for shipping because the item is being shipped from China. Long order processing times are normal for dropshipping. At the end dropshippers pocket mark-up minus marketing cost (Kale, 2020).
Hand-free soap dispenser Credit: Mr and Mrs Store, AliExpress website
Many successful stories in conducting dropshipping businesses are available on websites like YouTube. One of them is the story of Thomas Despin (cited in Kale, 2020). When Despin arrived in Bali in May 2016, he was broke. He was informed about dropshipping and went into a partnership with a friend back home in France, who granted him €3,000 initial cash to begin. Gradually, Despin came across an attractive idea: selling shapewear to French women using a video that he and his partner stole from another online store. Despin found the video awful, however, it worked successfully: $750,000 of turnover, and around $100,000 of profit for Despin, in just eleven months. To this day, Despin has never looked or touched the shapewear.
While this all seems impressive, we would suggest waiting a bit before quitting your job to pursue a quicker way to earn a living and jumping headfirst into the dropshipping adventure. First, because many statements, although less visible than the YouTube tales of overnight success, show that not everybody can be the next Jeff Bezos (European Union Intellectual Property Helpdesk, 2019). Second, many experts raise a lot of questions and call out social, economic, and environmental problems of the dropshipping scheme that will be discussed after closing the dropshipping story of Thomas Despin.
After securing $750,000 sales, Despin and his partner
announced shutting down their dropshipping business. Here is why “I’m the
opposite of what dropshippers like to say because they like to see themselves
as good entrepreneurs because they made money,” Despin says. “I’m completely
fine with saying that I made a lot of money, six figures, and still I think I
was dumb. I didn’t know what I was doing.” He adds that he dislikes his clients
as they complain a lot.
Thomas Despin, a former dropshipper Credit: Kale
What are the problems inside dropshipping business considering sustainability?
1. Social challenges: “Dropshipping is prominently starred in a work-at-home scam and is overrated.”
During the COVID -19 pandemic, scammers are using a dropshipping scheme to take advantage of the situation. Keller and Lorenz (2020), on New York Times website, report nearly 500 e-commerce sites (with web addresses containing “Corona” or “COVID”) showing up every day on Shopify to sell COVID -19 virus-fighting products. Many of those sites are being closed for generating exaggerated claims or selling fraudulent products. It was discovered that many of the sellers do not own the goods, nor have they verified that the goods are certified. Frequently, the sites’ operators are dropshippers who fulfill customers’ orders by purchasing articles on other websites. One of the new sites marketed as an “oxygen concentration” machine for $3,080. Another offered “Corona Necklace Air Purifier,” which for $59 claimed to provide “All Day Protection.” A third offered a $299 pill that ensured “Anti-Viral Protection” for 30 days. And sites such as CoronavirusGetHelp.com and test-for-covid19.com marketed home test kits for $29.99 to $79, none of which have been accepted by the Food and Drug Administration (FDA).
Increasing daily number of new sites on Shopify containing “Corona” or “COVID” Source: Keller, DomainTools, New York Times, 2020
Before the COVID-19 pandemic, dropshipping was already prominently starred in internet-based home business scams. Already in 2018, the founder of Weebly, Rusenko (cited in Mann, 2018) emphasized dropshipping is the newest scam. “It used to be the Nigerian prince that was emailing you, and now it is the burner brand on Instagram.” The State of Michigan Attorney General (2020) has warned to be on the alert for fake “gurus” promoting dropshipping as a very profitable remote work opportunity. The warning message includes that many dropshippers are trained to fool customers about where a product is originating from. The country of origin may not be revealed, or the dropshippers may post stolen photos of any physical storefronts to make buyers think the company has a physical location or that the product is originating from a particular place. Prospective dropshippers may be lured to pay for high-priced courses intended to teach them how to become a successful dropshipper and these courses may promote prospective dropshippers to trick buyers. Furthermore, dropshippers have neither control over quality as they never saw goods, nor over packaging (they cannot add extra protection). Thus, sometimes, these products do not match the customer’s quality and size expectations and lead to customer disappointments accusing dropshippers practicing scam.
2. Environmental costs: “Lack of transparency on electricity consumption and greenhouse emission data by the main supplier. Consumers and dropshippers have lack of awareness on environmental impacts”
Supplier side: A report by Greenpeace (2020), a non-governmental environmental organization, points out CO2 emission from China’s internet industry is skyrocketing. Power consumption from China’s internet industry is predicted to go up by two thirds from 2019 to 2023. In 2018, China’s internet data centers were powered by 73% by coal. Thus, Greenpeace calls out giant tech companies, including Alibaba Group on the urgency to dramatically scale up clean energy procurement and increase their transparency as Alibaba did not disclose electricity consumption and greenhouse gas emission data. Alibaba Group is the owner of the main supplier of dropshipping businesses, AliExpress. Considering transporting goods from China to buyers overseas, plastic and Styrofoam packaging, coal energy powered internet industry, we could imagine the negative impacts of the e-commerce business on the environment.
Consumer side: Professor Cohen (cited in Evans, 2018) from Columbia University who is teaching courses in Retail Enterprise says, consumers do not care where the goods are coming from, they see it, they desire it, they purchase it, they expect to receive it as promised. He also points out suspiciously cheap articles online are coming to a consumer from a dropshipper and consumers do not care for it. This is also reflected by the result of KPMG’s global survey (2017) conducted with] the 18,430 consumers in the 51 countries about what drives them to buy online or offline in the first place. The top three answers are the ability to shop 24/7 (58%), the ability to compare prices (54%), and the online sale/better prices (46%) respectively. Sadly, from all twelve drivers, sustainability is not part of consumer reasons.
Reasons consumers shop online instead of in stores Source: Global Online Consumer Report, KPMG International, 2017
Dropshipper side: Many dropshippers expect to make a lot of money online quickly. Thus, they do not consider long-term impacts on the environment and society and source products they sell from low-cost Chinese marketplaces like AliExpress. Even more, they use the sustainable message to attract buyers. From the interview of Kale and a former dropshipper, “Ellie” (who asked anonymity so that she could talk openly about her experience) describes the journey of her dropshipping business trading eco-friendly, plastic-free homeware almost ended in a catastrophe. Is not dropshipping about the least environmental-friendly method of buying and selling? “Obviously to the outside world” – Ellie says she was interested in selling eco-friendly homeware to make a difference. However, she admits she did the dropshipping business because her parents and she spotted a trend. In the count-down to 2018’s Christmas, Ellie and her partners were placing orders of $10,000 plastic-free homeware. However, their Chinese supplier was unable to cope and discontinued shipping the ordered goods. The goods arrived in poor conditions and covered in plastic packaging. Consequently, their inbox was full of raging emails from buyers, accusing them of committing a scam. One very disappointed customer sent a photograph of this plastic-free product in the trash bin (Kale 2020).
Ellie, an entrepreneur and former dropshipper Credit: Khoo Guo Jie
Furthermore, before the Pandemic COVID-19 began,
dropshippers in Bali were environmentally unfriendly as they flew around the
world non-stop (Neubauer, 2019). There is a potential risk that dropshippers
will return to old habits “flying around the world non-stop” when the COVID-19
virus over.
3.Economic problems: “Despite making a lot of money, dropshippers do not pay any taxes and take off. And the dropshipping model raises a lot of questions and risks related to intellectual property rights.”
People look for an exotic place with cheap living cost where they can apply their technology and expertise to quickly make a lot of profit and avoiding income taxes, and not put back anything into the community. The immigration office in Bali does not have enough resources. As per the Ministry of Immigration’s statement in 2019, only ten immigration investigators are working in Bali and thus they cannot oversee so many people (Neubauer, 2019).
The analysis of Google Trends on how frequently the “dropshipping” search term is entered into Google’s search engine relative to the total search volume from over a period in the past five years may be used to see the significant increasing trend and interest in dropshipping. Particularly in the era of the Pandemic COVID-19 from March 2020 to May 2020, dropshipping became a significant increasing topic in search interest. It might be due to the economic crisis where a lot of people have lost their jobs so that people are looking for a way out to generate money and a more flexible way of work. Malaysia and Indonesia are the two top countries with the highest interest in dropshipping followed by Ukraine. In Indonesia, Bali is the hub of the dropshipping business. Looking at this, there is an urgency for the local authority to increase their immigration investigators to tackle income tax avoidance in Bali, Indonesia not to miss the opportunity as more and more people are interested in dropshipping.
The increasing trend of “dropshipping” search term in the past five years Source: Google Trends, 2020
The European Union Intellectual Property Helpdesk (2019) points out the dropshipping model raises a lot of questions and risks related to intellectual property rights. Just because these goods are available on renowned websites such as AliExpress does not assure that they have a license to be sold in the country of prospective customers, or to be sold in the European Union. IP protection is territorial: a product may be legally sold in China (for instance, if no patent was filed there) but infringing IP rights in Europe (if one of its components is protected by patent in European countries). Hence, importing this product to Europe may imperil dropshipper in patent infringement claims. With this, the EU IP Helpdesk mostly refers to the fact that many “dropshippers” utilize third-party pictures on their websites, to advertise the goods sold. Rather than taking pictures of the products by themselves (which may be difficult when you have no stocks and never see them), dropshippers tend to utilize the product pictures made available by the manufacturers, or by global platforms such as AliExpress. The outcome? You have imagined it – copyright infringement claims from the owners of the pictures.
What are my lessons learned (personal reflection)?
In the past, I read some articles highlighting many startups leaving Silicon Valley for Bali, and people began to rename the coastal town “Silicon Bali” making a pun of “Silicon Valley” and an increasing trend of the digital nomadic lifestyle and co-working spaces in Bali. I was assuming that people moved to Bali to do some sophisticated computer programming aimed to develop e-commerce while spending their free time surfing, attending yoga classes, or enjoying marine biodiversity through diving. However, after discovering many digital nomads in Bali employ the dropshipping scheme, surprisingly via AliExpress, I am sort of disappointed.
The first time in 2016 I heard about AliExpress. I was surprised at how expensive prices of study supplies in Switzerland that are generally ten times higher than in Indonesia. Several former colleagues at the BFH Business School then suggested I checked on AliExpress to find more affordable study supplies. I came up with the dropshipping topic because out of curiosity as I often receive ads on personal Facebook and Instagram accounts from sites selling products that can also be purchased on AliExpress’s website. I received even more ads during the COVID-19 stay-at-home than before. I discovered there are many YouTube videos, articles, even more, online courses from self-declared successful dropshippers on how to start dropshipping and how to make six-figure sales in less than a year. However, when I was looking for dropshipping statistics and academic references on the internet, it was a bit challenging as the outputs of Google’s search and other search engines were dominated by dropshipping ads. It may be also because the dropshipping topic is relatively new, unlike avocado or shrimp production issues in which a lot of academic papers available to support data. This blog writing focuses only on the dropshipping model of the digital nomad and analyzing dropshipping impacts socially, environmentally, and economically. Writing solutions and analysis of effective measures to tackle dropshipping challenges are suggested.
To conclude, taking all this new information into account, I have become more aware of the negative consequences of the dropshipping model and will try to become more mindful of products I consume in regards to sustainability, for instance, product origins and supply chain. And I will look at a more sustainable way to generate income and will try not to go into dropshipping thinking, “I will get rich quick”.
