The growth opportunities available in China’s massive consumer market beckon to almost every global company, but for some, making the foray into the country has caused major conflicts with brands’ core identities.
This was the problem faced recently by cosmetics company The Body Shop, which just announced its choice to withdraw it only presence in mainland China when it learned it could not reconcile protecting its cruelty-free identity and still operate by Chinese laws.
The Body Shop, which projects an eco-friendly image that centers strongly around its promise that it does not test on animals, made the decision to remove all products from duty-free shops in China’s airports when it became clear that those products were possibly subject to animal testing.
Chinese law mandates foreign cosmetics have to undergo animal testing, and foreign cosmetics companies claiming to be against the practice have long received criticism from the Western world for compromising stated brand ideals by expanding into China.
Australian consumer site Choice reported that that The Body Shop had thought it had found a workaround from China’s mandatory animal testing law, saying that according to Chinese industry sources, “While no exemptions are specified in the legislation, cosmetics sold exclusively in duty-free stores do not have to undergo mandatory testing before being sold in China.”
Given The Body Shop’s strict policy, that loophole seemed like a good entry into the China market without compromising its brand identity. However, the report found that the Chinese government carries out random “post-market” testing, where it can pull products from shop shelves anywhere, including at duty-free stores.
The Body Shop joins a list of companies who had to submit to China’s way, or take the highway. Besides mandatory animal testing for cosmetics, other Chinese laws have caused dilemmas for Western companies over whether or not to maintain a presence in China. In 2010, Google China received much flak when it was revealed that it was censoring searches in accordance with Chinese law. In the same year, it decided to move all of its operations to Hong Kong, where searches would not be censored, to preserve their company’s motto, “Don’t be evil.” However, some believe that Google’s exit from mainland China was motivated by financial reasons, and not purely moral ones.
China’s cosmetics laws have left foreign companies scrambling to find ways to reconcile their brand image to the Western world. Some companies, such as Urban Decay, simply dropped their plans to expand into China. Others, such as L’Oreal or Shiseido, have tried working with Chinese authorities in hopes of persuading them to move away from animal testing. They have made some progress: the China Food and Drug Administration announced that animal testing would no longer be mandatory for “non-specialized cosmetics,” including shampoo, soaps, and certain skin products in June 2014. This is good news for companies who have previously held back, but are wishing to enter this $21.8 billion industry, where foreign brands reign supreme.
With these signs of change, cosmetics companies such as The Body Shop probably have more cause for optimism in the long run than those like Google. While China’s policy on censorship doesn’t seem to be changing anytime soon, its willingness to compromise on less politically sensitive issues may bode well for at least some image-conscious brands looking toward China.