How Zilingo is using technology to help its sellers stay on track with sustainability and ESG measures

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The fashion industry is known for its unfair employment standards and practices which are not always favorable and positive for the environment.

“This is mostly true, especially for fast fashion where the profits outweigh any concerns for the environment, reducing greenhouse gases or using organic / recycled materials,” says Aadi Vaidya, Singapore COO and Bengaluru-based e-commerce activation startup. Zilingo.

Many people now know that making jeans requires more than 4000 liters of water. It’s to change that – and other environmental impacts like these – that Zilingo decided to take a close look at their sellers and how they can be more sustainable.

Aadi Vaidya from Zilingo during a field visit in MP

“We are using digitization to unlock margins that can be invested in sustainable and environmentally friendly practices. We help fashion brands minimize the environmental impact of their operations, follow working practices and monitor sustainability throughout the supply chain, ”says Aadi.

Microfiber, a large group in Bangladesh that manufactures for some of the world’s biggest fashion brands, is a customer of Zilingo. They started working with Zilingo to first digitize and light up the factory shop floor, which was their first step in using technology to reduce defects and therefore reduce waste.

A few months later, using the power of data and technology, Microfiber asked Zilingo’s sales team to help them source sustainable fabrics to meet the demands of their Western customers.

“Giving a multi-geographic advantage, Zilingo opened up new suppliers to them in India, China and Vietnam. Forty percent of their current order book with Zilingo is now made up of organic cotton and recycled polyester, ”explains Aadi.

How come ?

The idea is to look at things at the manufacturing level and see if they can make a change that ensures profitability and sustainability. The main problem is an “obese” supply chain.

“By that I mean having more intermediaries in the process, the supply chain has more stakeholders, thus reducing the chances of sustainability,” says Aadi.

Zilingo wants to bring the brand and the manufacturer closer together. To this end, technology brings transparency.

Aadi explains that much of the margins that are sucked out of the supply chain start to be used by the people who create value. For example, the Zilingo factory digitizes factories, making quality control digital.

“This reduces faults by 50% and labor requirements by 30%. Waste also decreases. The workshop is more predictable and analytical, and orders can be placed in real time, ”he says, adding that this frees up working capital as well.

He adds that the team realized that while brands and manufacturers have now started talking about ESG and sustainability, there is still a long way to go.

According to a report from an audit tool Compare ethics, only one in five customers trust brands’ sustainability statements. It’s high time for brands to move beyond marketing and public relations initiatives and spread the word by reassessing their manufacturing process.

Zilingo’s team also found that nearly 80 percent of greenhouse gases created by the fashion industry came from manufacturing synthetic fabrics and nearly 10 percent from logistics and shipping.

“Brands often take an outside approach to solving environmental problems rather than re-evaluating their manufacturing practices, that’s where the real problem lies.

“We realized that most of the trendy supply chains (unlike an iPhone supply chain which is tight for every dollar and whose playbook is refined by Foxconn), are extremely archaic, dependent on middlemen, opaque and therefore have limited and exhausting margins, ”Aadi said.

Aadi with customers in Thailand

Can technology bring sustainability and profit?

Aadi says there must be an incentive for brands to become more sustainable and environmentally friendly, and to have an employee-friendly supply chain.

“What if this technology were to deliver more profits to relevant stakeholders while ensuring that the supply chain begins to become more transparent and sustainable?” ”

He says that in the past 14 months, there has been almost 5 times more digital adoption than expected before COVID for digitization. Digital tools remove opacity and middlemen, improve speed and reduce inventory days, freeing up more margins and bringing favorable changes in results.

“Other important benefits include transparency, predictability, accountability and traceability. All of these are essential to creating any irreversible positive change in our supply chains. These dollars would be invested in better salaries for staff, the use of better quality energy sources, education and marketing to brand buyers and, eventually, a more sustainable supply chain, ”said Aadi.

All over the world, consumers are changing and becoming increasingly aware of their purchasing decisions. If a supply chain is able to produce the same goods at the same price but with more conscious practices, it dramatically improves revenue growth for all stakeholders. Reason enough for Zilingo to give it all!

Edited by Teja Lele Desai


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