This chapter examines the critical transition of e-commerce in Sweden toward sustainable and circular models. It analyses the pressing challenges posed by high product return rates and increasing packaging waste, driven by the rapid growth of online retail. The chapter reviews current practices, knowledge, and innovative case studies in managing e-commerce returns and developing sustainable packaging solutions based on research and innovation conducted in Sweden. It further explores the opportunities and obstacles in implementing circular business models, emphasizing the fundamental roles of digitalization as an enabler and multi-stakeholder collaboration as a prerequisite for success. The specific innovation of these solutions for sustainable e-commerce lies in their systemic, digitally enabled, and multi-stakeholder approach to tackling sustainability through returns, packaging, and circular logistics. The analysis concludes with recommendations for future action to foster a more resource-efficient, competitive, and sustainable e-commerce ecosystem, focusing on influencing consumer behavior, ensuring economic viability of circular models, enhancing data transparency, and strengthening collaborative frameworks.