Applying The Circular Economy to Gain Trade Advantages in Fashion Recycling Business

Abstract

The two objectives of this article were: 1) to study the situation of applying the circular economy to create trade advantages in fashion recycling business and 2) to study problems and obstacles of applying the circular economy to create trade advantages in fashion recycling business. This qualitative study applied a documentary research method following Scott’s (1990; 2006) approach and interviewed 15 fashion recycling entrepreneurs and 15 experts on the circular economy, which were 30 people in total. Data was analyzed by using content analysis. 

            Findings: 1) the circumstances of applying the circular economy in fashion recycling business was found that the business operated on the 3R principles: Reuse, Recycle, and Redesign to achieve efficient and sustainable use of resources, to reduce the use of resources by purchasing raw materials that had a longer lifespan, and to use materials that could be reused resulting in the most cost-effective used of resources in every single process. The circular economy process was systematic. Industries planned and designed under the concept of restoring and giving new life to materials in their product life cycle and brought them to create new values. The process was continuously done in cycle with no waste. It also focused on preserving and balancing the use of natural resources. 2) the problems in applying the circular economy to create trade advantages in fashion recycling business were found that the industries did not have expert personnel who could apply the circular economy to work process, the budget allocation, and the selection of raw materials that were environmentally friendly, and the obstacles were: (a) financial aspect: the production process consumed in high operating costs, (b) technology aspect: transforming technology could be complex and required a high investment, (c) marketing aspect: building an understanding and acceptance of fashion recycling business in the market, (d) management aspect: careful management with proper planning, and (e) knowledge aspect: creating an awareness of fashion recycling business knowledge building.