How Proya Cosmetics Is Leveraging The Power of CSR: For Women, From Women

6"×9" b4136 Doing Good Business in China
© 2021 World Scientific Publishing Company

https://doi.org/10.1142/9789811233654_0016
by HONG KONG POLYTECHNIC UNIVERSITY on 11/22/21. Re-use and distribution is strictly not permitted, except for Open Access articles.
Chapter 16
How Proya Cosmetics is Leveraging

the Power of CSR: For Women,
Doing Good Business in China Downloaded from www.worldscientific.com
From Women
Mark Pufpaff and Dennis P. McCann
Abstract
Corporate social responsibility (CSR) is a concept with varying
interpretations. However, almost always, it involves socially oriented
partnerships between corporations and non-profit organizations. This
case details a partnership between China’s Proya Cosmetics and UN
Women. It aims to address the multifaceted issues facing women in
China today through fundraising, advocacy, and events. It also discusses
what CSR is and whether Proya Cosmetics is embodying its aims.
Keywords: Proya cosmetics, UN women, CSR, gender pay gap,
domestic violence, employment discrimination
16.1 Seeing
Gender inequality is a mounting problem in China. From the gender pay
gap to employment discrimination to domestic violence, women are
struggling to claim the rights they know they have. Let us break down a
few of the primary issues, to form the basis for this case study.
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136 Doing Good Business in China: Case Studies in International Business Ethics
16.1.1 Gender Pay Gap

In China, according to the World Economic Forum’s Global Gender Gap
Report 2015, women earned 65% of what men earned for similar work.
That means that if a qualified male payroll accountant earned RMB
10,000/month, an equally qualified female payroll accountant would earn,
for no other reason than that she is a female, RMB 6,500/month. You
would not be in rare company to think that that is not only unfair but
unjust, immoral, and should be illegal.
It is important to note, however, that determinations of the gender pay
gap percentages in China, as in countries throughout the world, depend on
a wide variety of variables which vary across the institutions conducting

the research. A good example of how the percentages can differ, depend-
ing on the parameters of the research methodology, is from a research
report published in March, 2016 by Glassdoor, a job and recruiting web-
site in the United States (US), on the gender pay gap in the US:
“In the U.S., men earn on average 24.1 percent higher base pay than
women in Glassdoor salaries. That amounts to women earning about
76 cents per dollar earned by men. However, once we compare
workers with similar age, education and years of experience, that gap
shrinks to 19.2 percent. Going further, when we compare workers with
the same job title, employer and location, the U.S. gender pay gap is
about 5.4 percent.”
In China, the gender pay gap percentages also vary, some estimates
r anging as high at 54% with others ranging as low as 17%. However, on
average there clearly remains a deep disparity in wages earned between
Chinese men and women.
16.1.2 Employment Discrimination

In 2016, a recent female university graduate named Xiaoyu was denied a
local household registration permit (hukou, 户口) for full-time work at a
research institution in Beijing. The institution had a policy to grant only
one hukou each year. Instead of Xiaoyu, who had interned at the institute
for three months, they granted the hukou to a male intern who had only
worked at the institute for 18 days. Not only had Xiaoyu passed a rigorous
interview process but she also excelled in her work during her internship,
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How Proya Cosmetics is Leveraging the Power of CSR: For Women, From Women 137
having represented the institute on work trips to different areas of the

Chinese mainland. Though she acknowledged there may have been other
equally if not more qualified candidates, she was disappointed to find out
from one of the hiring officials at the institute that her actual qualifications
were not taken into consideration. Upon inquiry as to why she did not get
the post, she was told the following:
“We are not discriminating against women; it’s just that we need a male
employee.”
This is not an isolated case. Women throughout China are struggling

to be equally considered for jobs they are, on paper, qualified for. It was
not a long time ago that “Male Only” and “Male Preferred” conditions
were ubiquitous on job postings, and it is still prevalent for women to be
automatically disqualified from a job simply for having the intention to
get pregnant within a two- or three-year period. Though progress can be
claimed, discrimination remains, and without significant legal recourse.
16.1.3 Domestic Violence

The Chinese government put into effect their first law prohibiting
domestic violence on March 1, 2016. This is great news, but the question
lingers as to why it was not done sooner. Official government estimates
put cases of domestic abuse, ones where the wife is verbally or physically
assaulted by her husband, at one in four women. Unofficial estimates
contend that the real number is much higher. Until this law, there was little
in the way of legal justice that victims of domestic abuse could claim.
Domestic abuse was considered a private (family) matter and outside the
jurisdiction of public concern.
Since women had no representation in court, the abuse was enabled to
continue unabated, which also prohibited the abusers from being held
accountable. However, horrific stories of murders, beatings, and sexual
servitude are becoming more and more well known. For example, the
murder of 24-year-old Li Hongxia at the hands of her husband, Zhang
Yazhou, who strangled her to death in the hospital she was at because of
the beatings he had given her earlier. Before her death, she had begun to
make known the abuse she was enduring, only to be told by her friends
and family that she should not get a divorce and should try to work it out
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with her husband, all to save “face”, the face of her family and the
reputation of the small rural village in which she lived.
But, it is changing, if ever so slowly. Women are beginning to vocalize

their abuse and people, both in China and around the world, are listening
and taking action.
16.2 Judging
Though there are many actors in the fight for women’s rights in China,
this case study will focus on the role of Proya Cosmetics Co. Ltd. (Proya),
with particular attention paid to the function of corporate social responsi-

bility (CSR) in their corporate strategy. A working definition of CSR is the
alignment between a corporation’s business objectives and their social
interests. The case for CSR attempts to establish a real relationship
between investments in social causes and increases in corporate profits.
Proya is one of China’s largest premium cosmetics companies, with
six brands operating under the Proya name and over 1,000 individual
products. The company’s mission statement is “Beautiful and Better Life”
and their products are branded as “Natural and Healthy Skin Care.”
However, they not only make quality products and benefit from sophisti-
cated and integrated marketing strategies but they also have a heart for
social issues and have built a robust CSR strategy to leverage that
interest.
In 2013, Proya became the strategic partner of UN Women (United
Nations Entity for Gender Equality and the Empowerment of Women).
Why? To promote women’s rights, which is certainly a worthy cause. But,
why would they do that from a business perspective? In short, because it
is good for the bottom line.
16.2.1 Why Might Promoting Gender Equality be Good

for Proya’s Bottom Line?
It cannot be reiterated enough that CSR is, or at least must be, strategic,
that is, something that will, or should, advance a given company’s
business objectives. With this in mind, we have to assume that Proya is
partnering with UN Women because somewhere, somehow, they think the
partnership will result in the sale of more cosmetics. To anticipate what
you might be thinking, this does not mean that their partnership is simply
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public posturing or that their intentions are insincere. It means that they
are not making mutually exclusive their responsibilities to their investors
and their service to the common good.

Proya sells cosmetics. Their target market is, generally speaking,
women, and particularly the underserved women in China’s tier-three and
tier-four cities. It is not mere coincidence, therefore, that they are directing
their social investments into a partnership that focuses on raising the
standards of living and working for women in these cities. If you were a
female consumer of cosmetics in, say, Anshan, a tier-four city in Liaoning
Province, and knew of Proya’s commitment to gender equality and
investment in programs that support the employment of women in cities
like your own, how would that make you feel? Would you not be the least
bit interested in supporting the Proya brand because of this? Proya wants
you to say yes. But, they do not only want you to say yes to buying their
products; more importantly, they want you to say yes to their mission to
serve the needs of underprivileged and discriminated women. The strate-
gic component is that in supporting their mission, you are simultaneously
supporting their business. That is the ideal of CSR programming and mes-
saging. That is why promoting gender equality might be good for Proya’s
bottom line.
16.2.2 Can CSR Become a Competitive Advantage

for Proya?
It was not long ago that “business ethics” was considered an oxymoron,
nothing more than a contradiction in terms. “Leave your ethics at home;
we are doing business” is one way to sum up this perspective. “Nice guys
finish last” is another. But, why leave your ethics at home? Is there really
no value in an ethical business strategy? Is there really no redeeming
quality in being a virtuous business professional?
The effectiveness of CSR hinges on its capacity for creating competi-
tive advantage, that is, for discovering new business opportunities hitherto
undiscovered or unrealized by anyone else in the marketplace. If a firm
figured out how to manufacture a widget for USD 5 less than their com-
petitor, it might be said that they hold a competitive advantage based on
price. If another firm boasts the highest quality product, their competitive
advantage would be based on quality. But, what if a corporation makes the
claim that their competitive advantage is based on their service to the
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common good, or their being good in general? It might sound odd at first,
but that is exactly the strategic claim of CSR initiatives.
When Proya partnered with UN Women, they dedicated themselves to

the cause of women’s rights in China. Given the history of discrimination
against women, not only in China but around the world, few would defend
this as a worthless effort. The effects of partnerships like this can be sub-
stantial, both internal and external to the firm: internal in the sense that they
create solidarity among employees; external in the sense that they attract the
interest of competitors and the consumer in the marketplace in general.
If you were L’Oréal, a competitor of Proya, how would you react to
their partnership with UN Women and their strategic decision to serve the
needs of women? What if they were being praised in the news and experi-
encing strong word-of-mouth marketing on social media? Would you not
feel as if you were missing out on an opportunity, one that they are enjoying
the benefits of? Or, what if you were a current female consumer of L’Oréal
products? Would you not be tempted to change your loyalty to a firm
explicitly and convincingly dedicated to a cause that affects you person-
ally? If nothing else, would you not begin to expect the same from L’Oréal?
These kinds of questions are the ones CSR strategists want companies
and consumers to ask themselves. Proya is attempting to pioneer a new
way of thinking, a fresh, innovative approach to business growth, one
where service and goodness become the standard for winning consumer
loyalty and the benchmark for industry performance. They want to move
away from the worn-out dichotomy between business and ethics, and
transform a so-called contradiction in terms into a necessity in practice.
16.3 Acting
So far, we have argued that CSR strategies can be good for the bottom line
and can create competitive advantages. But, there is a difference between
the potential for CSR strategy to accomplish these objectives and actually
implementing it and managing it so that it does. Let us document some of
what Proya has done since the beginning of its partnership with UN
Women in 2013. Then, you can decide for yourself.
16.3.1 September, 2013

Proya held a press conference in Guangzhou to commence the partnership
and donated RMB 3 million to the China Gender Fund.
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16.3.2 November, 2013

Proya held a fundraising event that included thousands of domestic
Chinese and international companies. All funds raised were donated to the
Women Employment Equality Project being conducted by UN Women.
16.3.3 November, 2013

Proya convened the UN Women Global Forum, where Proya CEO Fang
Yuyou led a group of 10 multinational CEOs in signing the Statement of
Support for the Women’s Empowerment Principles (WEPs), developed by
UN Women. Proya was the first private sector company in China to sign
the document.
16.3.4 March, 2014

The 6th annual WEP meeting was at the UN headquarters in New York
City. Fang Yuyou, Proya’s CEO, was the only Chinese entrepreneur
who was invited and he received positive feedback on Proya’s CSR
strategies.
16.3.5 October, 2014

Proya sponsored “The Enlightenment of Female Leadership and Workplace
Diversity to Commercial Development” seminar, jointly hosted by UN
Women and CKGSB, and aimed at increasing awareness about the need
to protect women’s rights.
16.3.6 November, 2015

Proya led a group of 38 companies from China in signing the WEPs in
New York City, USA.
16.3.7 December, 2015

Proya, alongside students from the Beijing Royal School and the Beijing
Normal University, supported UN Women’s global campaign to end dis-
crimination against women living in China with HIV. Their support was
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shown through various activities, which were documented and distributed

throughout social media channels.
16.3.8 May, 2016

Proya, along with other sponsors, helped organize a UN Women advocacy
event titled, “International HeForShe Roller Derby Invitational.” The event
was to promote UN Women’s “HeForShe” campaign and to support China’s
recently passed law aimed at protecting the victims of domestic violence.
16.4 Discussion Questions

1. Why is gender equality an issue in China?
2. From a business perspective, do you think it was smart for Proya to
partner with UN Women?
3. What do you think of the achievements of the Proya/UN Women part-
nership, listed in the ACTING section of the case? Do you think it is
impactful? Could/should they do more? If you were Proya, what kind
of work would you want to carry out with UN Women?
4. Do you think the partnership with UN Women will be good for
Proya’s bottom line and/or result in a competitive advantage?
5. Do you think that CSR partnerships are sincere in their social inten-
tions? Is it truly possible to do good (be profitable) by being good
(socially active)?
6. If you were a competitor of Proya in China, what would your response
be to their partnership with UN Women? Would you care? Why or
why not?
7. If you were a consumer of cosmetics in China and knew about Proya’s
partnership with UN Women, how would you feel? Would that influ-
ence your buying behavior or cause any shift in your brand loyalty?
Why or why not?
Bibliography
Sohu.com (2016). 河南25岁孕妇在医院做流产期间遭丈夫掐死 (A 25-year-old
pregnant woman in Henan was strangled by her husband during an abortion in
the hospital). Eastday.com. Retrieved on August 12, 2016 from http://xyq.163.
com/2015/zt/juqing/25ji.html.
b4136_Ch16.indd 142 19-05-2021 13:17:56

Women and Nature International (2016). PROYA partnered with UN Women in

2013 and became the first Chinese company to sign on to the WEPs. News
from Women and Nature International. Retrieved on August 12, 2016 from
https://www.womenandnature.org/newsroom/.
World Economic Forum (2015). The Global Gender Gap Report 2015. World
Economic Forum. Retrieved on August 12, 2016 from http://www3.weforum.
org/docs/GGGR2015/cover.pdf.
Xinhua News Agency (2016). 我们只是需要男生” 女性求职遭遇“隐性歧视”
维权难 (We just need boys! — Women face “hidden discrimination” in
seeking employment). News.ifeng.com. Retrieved on August 12, 2016 from
https://hope.huanqiu.com/article/9CaKrnJVBOP.
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6"×9" b4136 Doing Good Business in China

© 2021 World Scientific Publishing Company

How Proya Cosmetics is Leveraging

b4136_Ch16.indd 135 19-05-2021 13:17:56

16.1.1 Gender Pay Gap

a wide variety of variables which vary across the institutions conducting

16.1.2 Employment Discrimination

b4136_Ch16.indd 136 19-05-2021 13:17:56

having represented the institute on work trips to different areas of the

This is not an isolated case. Women throughout China are struggling

16.1.3 Domestic Violence

b4136_Ch16.indd 137 19-05-2021 13:17:56

But, it is changing, if ever so slowly. Women are beginning to ­vocalize

with particular attention paid to the function of corporate social responsi-

16.2.1 Why Might Promoting Gender Equality be Good

b4136_Ch16.indd 138 19-05-2021 13:17:56

and their service to the common good.

16.2.2 Can CSR Become a Competitive Advantage

b4136_Ch16.indd 139 19-05-2021 13:17:56

When Proya partnered with UN Women, they dedicated themselves to

16.3.1 September, 2013

b4136_Ch16.indd 140 19-05-2021 13:17:56

16.3.2 November, 2013

16.3.3 November, 2013

16.3.4 March, 2014

16.3.5 October, 2014

16.3.6 November, 2015

16.3.7 December, 2015

b4136_Ch16.indd 141 19-05-2021 13:17:56

shown through various activities, which were documented and distributed

16.3.8 May, 2016

16.4 Discussion Questions

b4136_Ch16.indd 142 19-05-2021 13:17:56

Women and Nature International (2016). PROYA partnered with UN Women in

b4136_Ch16.indd 143 19-05-2021 13:17:56

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6"×9" b4136 Doing Good Business in China

But, it is changing, if ever so slowly. Women are beginning to vocalize

16.2.1 Why Might Promoting Gender Equality be Good

16.2.2 Can CSR Become a Competitive Advantage