Fashion, clothing and textiles, Digital Platforms
What is it? ECOMMIT has developed a nationwide circular logistics network in Japan that effectively maximizes the economic value of recovered materials. Building on 17-year expertise in sorting and selling materials the company now handles the entire process of recovery, sorting, and redistribution, thus creating a circular value chain.
Why is this important?
The Circularity Gap Report 2024 shows that the global circularity rate has fallen steadily from 9% in 2018 to 7% in 2023 (Fraser et al., 2023). More virgin resources are consumed than ever (Fraser et al., 2023). Clothing is one major sector that needs changing. It is estimated that globally, one garbage truck of textiles is landfilled or incinerated every second, and less than 1% of material used to produce clothing is recycled into new clothing (Ellen MacArthur Foundation, 2017).
Whereas sectors like PET recycling in Japan are successful with recycling rates of up to 86%, recycling rates for clothing are only 15%, whereas reuse rates of clothing are 34% (Ministry of Environment Japan, 2022). This leads to 445,000 tons of fashion waste either being incinerated or sent to landfills annually (Ministry of Environment Japan, 2022). Moreover, around 20-35% of this waste is sent overseas where they can become a waste there again, leading to even more environmental pollution (The Japan Research Institute, Limited, 2021).
Main resource strategy: Slowing the loop by extending the lifetime of clothing and encouraging direct reuse. To encourage textiles reuse, ECOMMIT operates a global online auction platform on top of wholesales, with most customers in the ASEAN region.
Other resource strategies: Closing the loop by finding appropriate recycling routes for remaining textiles. For example, to encourage textiles recycling, ECOMMIT has sourced materials to create a recycled polyester brand and a new felt material e.g. for automotive parts.
Business model aspects:
- Value Proposition: ECOMMIT enables governments and companies (large and small) to be part of a circular value chain. It has developed a national circular logistics network that effectively maximizes the economic value of recovered materials. Moreover, it facilitates reuse and recycling for the end-consumer who can easily participate in the circular value chain by dropping off items in familiar places that fit into their daily lives.
- Value Creation & Delivery: ECOMMIT collaborates with municipalities and companies (small and large) where textiles and clothing are collected. They are brought to ECOMMIT’s Circular Centre, where sorting, data registration and shipment take place. ECOMMIT’s proprietary traceability system digitally tracks the flow of materials from recovery to re-circulation, enabling calculation of reuse and recycling rates and reporting on CO2
- Value Capture: ECOMMIT collects mainly post-consumer goods from local governments and companies and pays a partial fee for collected materials. ECOMMIT then sells items after collection and registration. ECOMMIT’s sales structure consists of the varieties including online sales, retail sales, domestic wholesale sales, international online auction sales, and wholesale overseas sales. Partially, it also pays an expense to recycling partners (polyester, wool and other material) to recover material for recycling if it cannot be directly reused in its present state.
Strategies for degrowth/ sufficiency: Reuse/ consume differently and offering a green product: ECOMMIT enables direct reuse of textiles and clothing in different markets by repurposing collected textiles and clothing. In addition, it enables the creation of green products from recovered recycled materials.
Business model experimentation practices: ECOMMIT originally started its business as K&K Ltd. by exporting used home electrical appliances. After becoming a registered corporation, it expanded into exporting agricultural farming machinery in 2008 (ECOMMIT Co.,Ltd., 2022). In 2009, it began trading used clothing and construction machinery and opened a sales office in Fukuoka and introduced internet sales (ECOMMIT Co.,Ltd., 2022). It gradually added new sales offices and warehouses across Japan and relaunched its website in 2014 (ECOMMIT Co.,Ltd., 2022). In 2015, the company name changed to ecommit (then re-branded as ECOMMIT in 2023). The company grew gradually through new partnerships with different local governments and businesses and chose textiles and clothing as a large waste stream in Japan as its key circular product (Interview, 2024).
Tools, methods and approaches used: The main proprietary systems developed by ECOMMIT are a system called “Eco Value Pack (EVP)” to ensure traceability of reused and recycled material and allow for the creation of environmental reports that show data such as materials collected, reused, recycled and repurposed, and CO2emissions saved compared to incineration. In addition, an online matching platform and physical recovery facility allow for reuse and recycling.
Sustainability outcomes: At the time of writing (June 2024) ECOMMIT has 3,000 collection points nationwide in Japan and is collecting 6,000 tons of clothing annually, reducing waste (Interview, 2024). For the distribution networks it set up, it achieved more than 98% of resource circulation so that most of the textiles are reused or recycled (Interview, 2024).
Sources:
ECOMMIT Co.,Ltd. (2022). Our company. Accessed 25 June 2024 at: https://www.ecommit.jp/en/
Ellen MacArthur Foundation (2017) A new textiles economy: Redesigning fashion’s future (2017). Accessed 25 June 2024 at: https://www.ellenmacarthurfoundation.org/a-new-textiles-economy
Fraser, M., Haigh, L., & Soria, A. C. (2023). The Circularity Gap Report 2023. Circle Economy.
Interview (2024) ECOMMIT Co.,Ltd. Interview with Director & CSO on 13 June 2024.
Ministry of Environment Japan (2022). Sustainable Fashion. Accessed 8 July 2024 at: https://www.env.go.jp/policy/sustainable_fashion/
The Japan Research Institute, Limited (2021). Accessed 8 July 2024 at: https://www.env.go.jp/policy/pdf/st_fashion_and_environment_r2gaiyo.pdf
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About project Circular X
Project Circular X is about ‘Experimentation with Circular Service Business Models’. It is an ambitious research project funded by the European Research Council (ERC) which supports top researchers from anywhere in the world. Project CIRCULAR X runs from 2020-2026. The project is led by Principal Investigator (PI) Prof Dr Nancy Bocken, who is joined by a multidisciplinary team of researchers at Maastricht Sustainability Institute (MSI), Maastricht School of Business and Economics, Maastricht University. The project cooperates with businesses who want to innovate towards the circular economy.
Project Circular X addresses a new and urgent issue: experimentation with circular service business models (CSBMs). Examples of such new business models include companies shifting from selling products to selling services and introducing lifelong warrantees to extend product lifetimes. However, CSBMs are far from mainstream and research focused on experimentation is little understood. The research aims to conduct interdisciplinary research with 4 objectives:
- Advancing understanding of CSBMs; their emergence and impacts
- Advancing knowledge on CSBM experimentation
- Developing CSBM experimentation tools
- Designing and deploying CSBM experimentation labs
Funding source
This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme, grant agreement No. 850159.
Using of this information
When you refer to this case, please use the following source:
Circular X. (2024) Case study: ECOMMIT - circular matching platform & infrastructure. Accessed from www.circularx.eu
