written by: Wong Ka Hei, Libby

According to Nielsen Global Corporate Sustainability Report, 66% of global consumers and 73% of global millennial are willing to pay extra for product offerings with sustainable cause. Corporate social responsibility (CSR) has become a notion of advocacy for many companies in recent years. According to the newly released 2016 PwC Global CEO survey, 64% of CEOs say that “corporate social responsibility is core to their business rather than being a stand-alone program.”

Nowadays, with an abundance of false information spreading across the internet, millennial who are frequently surfing the web for information, are conscious and skeptical about marketing messages from companies with ambiguous motive. They desire products from companies that have transparent CSR commitments to give back to the society. As such, CSR has become one of the core strategic imperative for company/brand image building and customer relationship engagement. According to a 2015 Cone Communications Millennial CSR Study, “more than 9-in-10 millennial would switch to brands that associate with a cause.”

The beauty and cosmetics industry is one of the most prominent sectors using anti-animal-testing and cruelty-free as its core CSR promotion anchor. Global anti-animal-testing/cruelty organizations such as PETA (People for the Ethical Treatment of Animals) and the Humane Cosmetic Act are working relentlessly for banning of animal testing. The same for brands like LUSH, The Body Shop, and Bare Minerals.

Market expansion or social cause
A well-known cosmetic brand M.A.C earned its fame with its long history in AIDs funding CSR campaigns, VIVA GLAM. M.A.C invites figures from the LGBT community as their spokesperson to break the stigmatized AIDs concern. M.A.C also joined PETA to show support and respect for animals that are suffering for human cruelty.

However, China is now giving a dilemma for cosmetic companies on the stance of animal testing. Retail value of cosmetics in China will reach RMB700 billion (USD106.82 billion) in 2017 with an annual growth rate of 20.8%. This attracts a lot of cosmetic companies to cash-in from the less-explored China avenue. The only problem is that Chinese regulations require cosmetic company to pay for animal testing in order to sell their products in the country. Apparently M.A.C goes straight for it, with a statement explaining their business decision as, “China tests on animals as part of its safety assessment of cosmetic products. We love our fans and we never want to exclude them anywhere.” (from the Q&A section of the M.A.C website) This stirs up a boycott on M.A.C cosmetic around the beauty community, including beauty columns/pages on Facebook, Youtube, Twitter etc.

 

 

Comparing brands like The Body Shop who chose to retreat from China market due to the risk of animal testing, won a lot of applause and respect.

What would be good in a long run?
Even though M.A.C is cashing-in with its entry into the flourishing China market, M.A.C is believed to have lost a lot of loyal customers. Their brand image has been spoiled especially in the animal-loving society for not living up to their promises. On the other hand, even though The Body Shop has lost the market in China, they successfully sustain their brand values of no animal-testing and cruelty-free. I figure the foregoing of the multi-billion-dollar China market to preserve CSR brand equity, could be a good thing in a long run. For any developed countries, it could be a matter of time for them to join the anti-animal testing camp.

References:

https://www.huffingtonpost.com/mark-horoszowski/64-of-ceos-are-increasing_b_9161924.html

http://www.nielsen.com/hk/en/press-room/2015/consumer-goods-brands-that-demonstrate-commitment-to-sustainability-outperform.html

http://www.ptl-group.com/blogs/cosmetic-industry-in-china

https://www.forbes.com/sites/micahsolomon/2014/04/21/millennials-the-biggest-generation-of-customers-ever-dont-care-about-the-internet/#505184766b61

https://www.huffingtonpost.com/ryan-rudominer/corporate-social-responsi_9_b_9155670.html

https://cmr.berkeley.edu/blog/2017/1/millennials-and-csr/

https://www.thebodyshop.com/en-gb/about-us/against-animal-testing

http://www.veganbeautyreview.com/2015/03/becrueltyfree-week.html