With more customers expecting cosmetics to be cruelty-free, companies that ban animal testing can improve their corporate image and even boost sales, animal-rights advocates claim.
However, a marketing professor warned of a negative impact if a ban comes across as just a sales gimmick.
Lawmaker Gary Chan Hak-kan said animal welfare had become a growing concern in Hong Kong, and cosmetics companies that adopted cruelty-free policies would attract new customers.
The animal-rights campaigner and legislator for the Democratic Alliance for the Betterment and Progress of Hong Kong suggested the government should take a lead by inviting cosmetics companies to sign a "cruelty-free" pledge.
This could be followed by mandatory labelling to identify cosmetics which have been tested on animals. Eventually the city could impose a ban, as in the European Union.
He said new testing methods, such as the use of artificial skin and computer technology, were replacing animal testing. "I believe most cosmetics companies would not mind paying an extra bit of money for labelling, which is a relatively small amount compared to the extra profit they are likely to make after their corporate image is spruced up."
The Hong Kong-based Asia-Pacific branch of People for the Ethical Treatment of Animals echoed this view. "As awareness spreads, more and more consumers are in search of products that don't harm animals," the group said.
Samart Powpaka, a marketing professor at Chinese University, cautioned that the success of any such campaign depended on customer perception.
"The impact could be neutral or even negative if the public perceive the campaign is done out of self-interest or is only a marketing gimmick," Powpaka said.
He said companies and welfare groups should also demonstrate the reliability of alternative testing methods.
Two years ago, the South China Morning Post reported that leading cosmetics brands Estee Lauder, Mary Kay and Avon had quietly abandoned cruelty-free policies to get a slice of the massive mainland market, which at the time required cosmetics to have been tested on animals.
Dr Nick Palmer of Cruelty Free International, which is campaigning for a global ban on cosmetics tests on animals, said those companies still allowed animal testing.
Since July, the China Food and Drug Administration no longer requires animal testing for make-up, skin, hair and nail-care products and fragrances that are domestically produced. The new rule does not apply to cosmetics made outside China, or to "special-use cosmetics", such as hair dyes or skin-whitening products.
"Although non-animal tests are often cheaper in the long run, it's often tempting for companies to go on doing what they're used to doing," Palmer said.
"All the major companies we talked to said they were looking at starting to move over to the non-animal option and I think that the trickle will become a flood sooner than most people expect."