In today's technologically-driven era, the rapid obsolescence of electronics has led to mounting concerns about electronic waste (e-waste). According to the United Nations, the world produces as much as 50 million tonnes of e-waste a year, equivalent to the weight of all the commercial airplanes ever built. If nothing changes, this number is projected to increase to 120 million tonnes by 2050.
Amidst this challenge lies an opportunity for a more sustainable approach: the circular economy. This model emphasizes the refurbishment and reuse of products, reducing the need for raw materials and minimizing waste.
One company championing this cause in the realm of electronics is ATRenew. To gain deeper insights into this burgeoning industry and its future, we sat down with the CEO of ATRenew, Kerry Chen.
TechTimes: Mr. Chen, can you elucidate on ATRenew's inception and its evolution over the past 12 years?
Chen: In 2011, during the shift from feature phones to smartphones and from 3G to 4G, I noticed a significant gap. People struggled to recycle their old phones, facing issues like lack of transparency in pricing and concerns about data security. Recognizing this need, ATRenew was born with the vision to be China's premier online phone recycling company.
In 2011, we established AHS Recycle. The initial vision for the company was to be China's first Internet company that recycles mobile phones. A business that can meet users' needs often contains huge potential, and the recycling industry is conducive to environmental protection and has long-term social value. Over a decade, our focus expanded from mobile phones to diverse electronics and even luxury items such as bags, watches, prestigious liquor, gold, and jewelry. As we evolved, our commitment to environmental sustainability deepened. We're proud to be industry pioneers in transparency, regularly releasing our ESG reports.
After 12 years of growth, we achieved total revenues of RMB9.87 billion ($1.37 billion) in 2022, mainly focusing on consumer electronics transactions and services, such as mobile phones and laptops.
TT: How does ATRenew employ technology to extend electronic lifespans and maintain refurbished product quality?
C: Our approach combines innovation and stringent quality checks. Since our foundation, we've developed systems like our 38 inspection criteria and 36 grading tiers. This transforms non-standard products into standardized, tradable SKUs.
We've also adopted automated quality checks, eliminating human error and boosting efficiency. As of 2023 ATRenew has eight operation centers across China, among which Dongguan and Changzhou have realized automated operations, and we will gradually automate the 6 remaining operation centers. At the same time, we open our standards to cooperative merchants, empowering more than 440,000 partners to conduct quality inspections quickly and accurately. Our dedication extends to products with no secondary use; we partner with certified institutions for their eco-friendly disposal.
As for refurbished product quality, we uphold stringent standards. Devices undergo minimal alterations and any changes are transparently communicated to consumers. We've implemented a digitized refurbishment process, ensuring quality and transparency at every step, as well as after-sales service (our 360-day warranty). We've even released a newly developed system aiming to streamline, digitize the refurbishment process in October 2022, allowing consumers to access information about the refurbished products more transparently and efficiently.
To round it off with some concrete figures, in 2022, ATRenew recycled and supervised the green disposal of a total of 270,000 sets of waste electronic devices, reducing the pollution of electronic products by about 43.2 tons.
TT: How does ATRenew address privacy concerns during refurbishment?
C: Data security is, of course, paramount. First of all, we provide face-to-face privacy cleaning for users, while old phones will also undergo in-depth privacy cleaning at the operation center. Additionally, we've developed AiQingChu, a proprietary system that erases and overwrites data multiple times, preventing any recovery attempts - and that supports more than 20 different international mainstream standards for deep data cleaning.
This system has been applied in scenarios such as the 1900+ stores of AHS Recycle and eight operation centers across the country. Finally, ATRenew is the sole enterprise with ADISA certification (for AiQingChu) among domestic counterparts, which further highlights our commitment to protecting user privacy.
TT: Your ESG report underscores ATRenew's sustainability commitment. How is this integrated into your operations, and how does technology facilitate this?
C: Integrating ESG values is a multifaceted effort, involving continuous optimization and risk management. Our three-tiered ESG management structure ensures systematic and effective governance. Technology plays a pivotal role, from enabling large-scale recycling services to promoting efficiency in operations. Our commitment to sustainability is evident in our measures, like disclosing carbon emission reductions, focusing on green operations, and advocating for a broader circular economy.
Since 2020, we have released annual ESG reports in both Chinese and English for three consecutive years in accordance with GRI Standards and SASB Standards, objectively disclosing our management and effectiveness in circular economy and sustainable development.
As these reports show, ATRenew's carbon emissions have consistently decreased over the past three years. For example, in 2022, ATRenew's greenhouse gas emission intensity (scope 1 + scope 2) was recorded at 0.30 tons of CO2 equivalent per million RMB, achieving a decrease of 18.9% compared with 2021. Meanwhile, ATRenew environmentally friendly dismantled 270,000 electronic devices, reducing electronic product pollution by 43.2 tons, while also recycling and reusing 18 tons of packaging fillers for B2B parcels, as well as 36,000 packaging boxes for B2C parcels.
TT: As you envision ATRenew as a global leader in pre-owned electronics, what's on the horizon for the company?
C: We aim to bolster our recycling services, transform AHS Recycle into a national brand, and invest more in automation technologies. Our vision is both expansive and eco-centric, with a goal to instill a green and circular consumption mindset globally. Specifically, we aim to ramp up market education and provide multi-category recycling services for consumers without additional cost and to guide consumers to develop green and circular consumption habits. By fostering ESG capabilities and collaborations, we're confident of a sustainable future.
We thank ATRenew and Kerry Chen for sharing these great insights and wish them all the best in their future endeavors.
