Going Green: Business Solutions to Reduce Delivery Plastic Pollution in Shanghai
Editor: Tian Qiu
2025.7.7
Editor's Note: This is adopted from Team 163's Business Case presentation in International Economics Olympiad (IEO) China National Round 2025. Special thanks to my teammates -- Yuxuan Zhu, Zixin Yang, Yinan Wang, and Sirui Wang from Shanghai Starriver Bilingual School -- for their instrumental contributions to this.
Background
---- PART I ----
Key contributor to this section: Yuxuan Zhu
Why Plastic Waste, and Why Shanghai?
Plastic waste is a global crisis, with nearly 400 million metric tons produced in 2021 and 350 million metric tons dumped into nature. Center of the Yangtze River Delta, Shanghai's demand for delivery services is significant. Shanghai is the most populated city in China and one of the most populated city around the world. This factor, combined with advanced technology and high average living quality, result in a significant demand for delivery services, including necessities, foods, and other entertainment products. We also chose Shanghai due to its familiarity with garbage classification, which ensures higher feasibility for our strategies.
What's up with Shanghai?
In 2024, Shanghai handled 4.95 billion delivery packages, averaging 781,000 units per square kilometer annually. The city’s high density and consumption drive significant plastic waste, with 74,000 tons of plastic packaging yearly. Plastic film is the largest component, showing the need for targeted recycling. Therefore, addressing these specific waste streams in Shanghai’s delivery industry is urgent.
Solution Overview
---- PART II ----
Key contributor to this section: Zixin Yang
Figure 1: an overview of our solution
A recycling company
Our overall solution is to establish a recycling company, which serves as a central hub and connects businesses and consumers through innovative strategies. Our company achieves our environmental protection goals by constructing a complete recycling chain of plastic packaging waste and strengthening the engagement of both retailers and consumers.
Business to Business (B2B)
The B2B strategy ensures that plastic waste is efficiently collected, processed, and reintroduced into the supply chain, as shown in the yellow part of the graph: producing tracked and endurable plastic packaging, selling them to delivery companies and retailers, and finally collect them from consumers after being used and provide back for retailers.
Business to Consumers (B2C)
The B2C strategy encourages consumers to return waste plastics and stimulates more brands to cooperate with us, as shown by the green cycle. Since brands want to build up eco-friendly brand figure and reputation, they will be willing to issue NFTs, which is non-fungible tokens, and vouchers, that could be either bought by investors or used by consumers who help complete the recycling process.
Strategy I: B2B
---- PART III ----
Key contributor to this section: Tian Qiu
Subscription Business Model
We plan to set up a subscription system, aiming our clients at delivery companies. If they subscribe our system, they will obtain our recycled plastic at a decreased price. While enjoying the benefit of having a lower cost of packaging material, they must pay a subscription fee in each period. By setting up the subscription system, we aim to incentivize companies to use recycled materials as they cost lower, encouraging plastic recycling. Also, for ourselves, we could stablize long-run cooperation and increase revenue by greatly increasing the number of loyal clients.
Blockchain Management & Decentralization
We achieve decentralization by setting sub-stations scattered around the city. To improve accuracy of management, we use blockchain management to track the status of recycled materials. Each block contains encrypted data of the information of the materials, such as package ID, date and location of manufacturing, and lifecycle history. We could update the data, clearly showing how many times each package has been reused and the conditions at each lifecycle stage. For example, when customers receive package from deliverers, deliverers can report the reception to the company, and the information contained in the block referring to this package will be changed by technicians of the company. The status include: new-in-company, out to retailers, out ro deliverers, out to customers, recycled into sub-stations, etc..
Benefits
Strategy II: B2C
---- PART IV ----
Key contributor to this section: Yinan Wang
Non-refundable Tokens (NFTs) and Vouchers
We will give consumers who collect plastics two options. First, they could receive NFT collectible, which is a unique digital asset that certifies ownership and authenticity of items like art, music, and virtual goods. Or else, they could receive a voucher from participating firms. Consumers can trade their plastic wastes for NFTs or vouches. This plan creates a strong emotional attachment with consumers to recycle plastic by offering both short-term and long-term benefits. This could significantly increase recycling rates.
What effects do they have?
-- NFT, mint by popular IP, would strongly emotionally attached to consumers because of their collection value, incentivizing them to collect and recycle plastics.
-- Due to high demand of NFT, the market value of NFT would increase, making it an appealing investment for investors.
-- Not only firms participate in minting NFT would establish an eco-friendly figure, they would also receive money flow from investors.
-- Consumers who emphasize the collectable value of NFT could keep it, while others who emphasize the market value could trade in online markets. On the other hand, people who are reluctant to own NFT could choose to have vouchers, which will give them discount when they do purchase in participating firms.
-- Recycling companies would earn a profit by selling re-produced plastic to delivery companies.
B2C in two slides......
Financial Projection
---- PART V ----
Key contributor to this section: Sirui Wang
Revenue and Returns
Assumption 1: Delivery volume will see a generally constant increase within this period of time
Assumption 2: NFT value will see sudden booms and fluctuations, but the proportion of revenue remains relatively small
Assumption 3: Costs of reuse processes will decrease at a rate higher than increases in operational scale
Sensitivity Analysis
Assumption 1: (Left) Calulations are made with one variable, ceterus paribus
Assumption 2: Industry growth does not significantly alter existing service expansion rate, due to logistical issues
Target Metrics
Financial Metrics
MOIC (Multiple of Capital Contributed): 2.61x
IRR (Internal Rate of Return): 44%
Churn Rate: 5% annual
Break Even Point: 5 years
Profit Margin: 72%
Environmental Metrics
Package Reuse Rate: 85%
Lifecycle Extensions: 10 per package
Total Plastic Diverted: 500k kg
Conclusion
---- PART VI ----
Our recycling company
Before you go!
We are glad to thank for:
--References
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
https://www.longfinance.net/media/documents/GFCI_33_Report_2023.03.23_v1.1.pdf
https://www.spb.gov.cn/gjyzj/c100276/202501/460d02f2e54c4d0ebbba3a4f431d0042.shtml https://www.greenpeace.org.cn/wp-content/uploads/2019/11/%E4%B8%AD%E5%9B%BD%E5%BF%AB%E9%80%92%E5%8C%85%E8%A3%85%E5%BA%9F%E5%BC%83%E7%89%A9%E4%BA%A7%E7%94%9F%E7%89%B9%E5%BE%81%E4%B8%8E%E7%AE%A1%E7%90%86%E7%8E%B0%E7%8A%B6%E7%A0%94%E7%A9%B6%E6%8A%A5%E5%91%8A-.pdf
https://xueqiu.com/2826618037/286021953?md5__1038=eqRxnDuD9DcDyiKqDsD7IqHfSCAXxxxID
https://www.zgfeipin.cn/expo_17217_1/
https://amela.tech/discover-a-detail-breakdown-for-cost-of-blockchain-development
NFT Market Size, Share & Growth Report [2024-2032]
The Rise and Fall of NFTs: Floor Price Fluctuations and Patterns
https://m11g5d.smartapps.baidu.com/?searchid=15301209639314171765&is_immersed=0&tplname=ins_application_card&srcid=60327&lid=15301209639314171765&_chatExt=%7B%22id%22%3A%2215301209639314171765%22%7D&_chatQuery=上海市面积&_swebScene=3711000000000000
--Team 163 in 2025 IEO China Round (listed in presentation order):
Yuxuan Zhu
Zixin Yang
Tian Qiu (the editor)
Yinan Wang
Sirui Wang
--And, Most importantly, YOU.