Urban Decay and the downside to beauty’s growth in China

Image credit: BeautyPackaging.com

It’s no secret that China’s beauty market has experienced phenomenal growth for a number of years - in fact, China has become the fastest growing beauty market in the world over the last decade. Prestige beauty is particularly strong, with NPD Group reporting a market growth of 21% in 2011 alone. So naturally, China is now very much in the sights of many UK beauty companies wanting to capitalise on a whole new - very lucrative - market.

However, entering the Chinese beauty market comes at a price, because Chinese law states that before any beauty products can be marketed in China, the country may require the products to be tested for safety in China’s own laboratories… on animals. While this may not be an issue for some beauty companies, for any brand that bases its identity and ethos on being animal-friendly, it basically makes China a no-go area unless it manages to get granted exemption from animal testing.

A number of beauty brands have already launched in China with great success; in particular L’Oreal, which tipped over one billion euros in sales last year. But one brand’s decision to enter the Chinese beauty market has come into the firing line this week: Urban Decay. For a brand that is staunchly against animal testing and has built up huge consumer loyalty around this ethos, Urban Decay's move has prompted shock, outrage and a backlash from its consumers. Urban Decay has issued a press response in its defence, which states:

“Do we like China’s policies? No…and that is really the point. Going into China was a huge decision for Urban Decay. But, we believe that change cannot and will not happen by outside pressure alone in a closed market. Change can only happen from within. When we enter the Chinese market, we will do our part to help make those changes.

“Yes, we are a for-profit company. And yes, we would eventually like to make money in China. But we don’t stand to turn a profit in China for quite a while, partially because the market isn’t quite ready to sustain an untraditional brand like ours. If it were only about the money, we would wait a few years. But our foray into this market is also about participating in an amazing time of change in China.” (You can read the full statement here.)

Unfortunately, Urban Decay’s decision to deny they entered a booming market for financial reasons and instead did it to encourage animal-friendly practices, even though it is prepared to pay for animal testing to be done on its products in China, has only aggravated the situation. As one reader commented on Lipglossiping’s blog post: “If they don’t expect to make a profit in China anytime soon, and they know that their product doesn’t necessarily appeal to the current market, then what’s their goal? It is so presumptuous that they will enact change by their entrance to the market when human rights advocates, NGO groups, and others have yet to achieve it.”

Furthermore, the BUAV has just announced that Urban Decay has lost its Cruelty-Free certified status because of its decision to sell on the Chinese market. So whatever Urban Decay's intentions may be by launching in China, it could be at the expense of its brand credentials and its existing loyal consumers worldwide.

What do you think of Urban Decay's decision to enter the Chinese beauty market?

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