How ECOCO’s Recycling Business Creates NT$200M New Green Money
As opposed to waste collection and recycling services run by government agencies or NGOs in the rest of the world, Andrew Li’s private entity “ECOCO” has devised a new business model to translate waste recycling ecosystem into a lucrative business.
Since its operation in 2018, ECOCO has already placed 108 reverse vending machines in 12 cities of Taiwan. As of now, the cumulative collection volume has amassed to 14.49 million plastic bottles, 3.01 million aluminum cans, 11.52 million Plastic#5 (polypropylene or “PP”) cups, and 2.09 million waste batteries; 70,000 households have engaged in the point-reward program to trade recyclables for points, and 45 brands in Taiwan are lined up to build a network of over 500 outlets or e-commerce platforms for point-redemption. Through the program, consumers can enjoy discounts or redeem goods or services from a range of participating merchants, including restaurants, department stores, pharmacies, optical shops, karaoke lounges, gas stations, art galleries, diving schools and insurance companies within the network.
Since its inception 3 years ago, more than 30 million points have been redeemed for consumption valued over NT$200 million, spurring the growth of consumer market in Taiwan.
YC – Yvonne Chang, Publisher of GO Natural Food Guide
AL - Andrew Li, Founder of “ECOCO Circular Economy”
YC: What special meaning does “ECOCO” imply?
AL: “ECOCO” stands for Eco Coin (circular currency). It’s a point-reward program based on the concept of circular economy, aiming to create a better world by uniting more citizens, enterprises and groups towards a common goal. To citizens, waste is exchanged for points redeemable in a variety of cooperative merchants. In this way, a truly circular economy can work out when “trash” becomes convertible “currency” for citizens to trade for goods or services from the merchants.
YC: Providing vending machine leasing options for clients is the key business model of ECOCO. How does ECOCO appeal to tenants?
AL: Most of our tenants are retailers, cafes and restaurants. ECOCO can benefit their businesses. Tenants with ECOCO can offer store-specific incentives so that citizens in the neighbourhood will come back regularly to recycle and shop, thus ECOCO helps them attract more walk-ins and drive sales to their stores. We will pick up the waste from the tenants, and then resell the waste to the waste processing plants at the back-end. Throughout the collection, tenants themselves do not need to handle waste transportation, but can earn additional income from waste sales. We tailor different leasing models according to needs of our tenants. Profit-sharing from our waste sales with more tenants is one of our long-term business goals! After all, they play their key role in onsite maintenance. Lastly, purchasing a reverse vending machine involves high initial costs, however, leasing from ECOCO is much cheaper than buying a new one.
YC: To citizens, the more diversified the products or services that points can be redeemed for, the more people will participate. For those participating merchants such as Foodpanda and Taiwan’s bubble tea chain Milkshop who offer points for redemption, how do they find ECOCO program attractive to them?
AL: To the participating merchants, partnering with ECOCO to provide citizens with a variety of products and services will in turn encourage them to develop a sustainable habit for handling recyclables, thereby, increasing the amount of waste to be recycled. This program turns out to be a viable way for enterprises to carry out the Corporate Social Responsibility (CSR) initiative. Meanwhile, consumers are more loyal to companies with sincere commitment to environmental protection. So, being ECOCO’s partners help them build a better corporate image. Next, higher waste recycling rate will create more points for redemption, propelling citizens to spend at different merchants, which is a direct way to connect new customers with the participating merchants. Lastly, merchants no longer have to spend lavishly on commercials published on traditional media, such as TV and prints, with unknown effectiveness. Instead, our app-enabled point-reward program helps merchants to achieve “precision marketing”. Through data analysis at the cloud, they can gain insight from consumers’ behavior, in order to formulate a more target-oriented marketing strategy.
YC: Collecting plastic bottles for recycling is not simply dropping the stuff into the recycling vending machine. Before dropping them into the machine, some procedures have to be taken to ensure the waste quality. Otherwise, they will end up in landfill. How does ECOCO provide civic education for them when it comes to recycling?
AL: Although the Taiwanese have a strong eco-awareness, it is not easy for them to take the initiative when it comes to sorting trash. When different types of trash, such as aluminum foil bags, PET bottles (Note: the bottle itself, cap, and label are made of three different types of plastic materials) are dropped in the same machine without careful pre-sorting, it will add costs to re-sorting and cleaning in the waste treatment plants. Our smart recycling vending machines specifically collect Taiwan’s three most common waste bottles, from PET bottles, aluminum cans to plastic cups. Capitalizing on the Internet of Things and optical recognition system, our machines sort waste bottles accurately in order to prevent citizens from mistakenly dropping other types of waste into the smart collectors. Our sensors will also detect whether there is any residual liquid inside the bottles. If bottles and cans are larger than standard size by 5%, our smart machine will reject the waste input. This is our way to encourage everyone to wash the bottles and cans before dropping them into our machines.Thanks to our effort in encouraging the public to remove the caps, clean empty bottles, and detach the labels before dropping them into our machines, the waste we collect is of high quality. That saves the expenses of the waste treatment plants in the initial sorting process. So, they are more willing to buy our collected waste at higher prices, bringing us better profits.
YC: Currently, ECOCO offers three different types of smart recycling vending machines for bottle, battery and all-in-one (bottles, cans and batteries) collection respectively. The bottle collectors imported from Norway are expensive and each costs nearly NT$1 million. Will you consider any in-house production to trim the expenses?
AL: At the start of our business, all of our machines were imported from Norway; however, at the turn of 2022, we begin to launch our own 100% Made-in-Taiwan bottle collectors. Due to the pandemic, we have tested different combinations of software and hardware to work out several new models with "zero-touch mode".
In fact, the current machine for battery collection is our own development entirely "Made in Taiwan". Our government is now providing an incentive to those citizens taking part in battery recycling. A collection volume of every 500 grams will give them back NT$11, but if it weighs 499 grams or below, you’ll earn nothing. To hit the minimum limit, citizens are likely to amass 500 grams of batteries before recycling. However, at that point some of the batteries accumulated may be rusty and leaking. Here is what sets our service apart from the government program: our smart machine can accept one battery only and reward points. We estimate that the collection volume per ECOCO battery collector is 50 times of the volume per government-owned machine in any convenience store.
YC: What are ECOCO’s goals and business plans for the coming year?
AL: By utilizing our business experience and collected data over the past 3 years, we will extend our reach across Taiwan, and resume pre-pandemic negotiation with our overseas partners. Our business model based primarily on the leasing model has turned profitable since the beginning of this year. We will go on to expand our revenue stream and go for an IPO in the medium to long-term run. A new model of recycling vending machine will be launched at the end of September to collect items other than bottles, cans and batteries.
“Frankly, what ECOCO intends to do is not just ‘collection and recycling waste’ but building an ecosystem as the mechanism to garner everyone’s attention to ‘waste collection and recycling’. We are somewhat a one-stop waste collection platform using software and physical equipment to connect more companies and a wider community within the ecosystem.”
Company: ECOCO Circular Economy
Enquiry: contact@ecoco.xyz