Industry News: Women's Hygiene Products Market: Seizing Structural Opportunities, Promising Prospects for Quality Brands

Women's absorbent hygiene products have undergone a revolutionary shift from reusable to disposable, continuously enhancing product functionality and user experience through improvements in form, absorbent cores, and surface materials. Today, sanitary pads have been upgraded in terms of design, surface materials, and core functionality.

As essential consumer goods, women's absorbent hygiene products fall under the fast-moving consumer goods (FMCG) category. These products include sanitary pads, panty liners, period pants, tampons, menstrual cups, and more. In 2021, sanitary pads dominated the Chinese women's absorbent hygiene products market with a 91.5% share (CAGR 2016-2021: 3.7%). Panty liners accounted for 7.6% but have been on a decline due to safety concerns (CAGR 2016-2021: -2.2%), while tampons have a low market acceptance, holding only a 1% share. However, tampon sales have grown rapidly (CAGR 2016-2021: 30%). This segment has seen significant advancements, evolving from reusable to disposable products, and continues to refine its form, absorbent cores, and surface materials for better functionality and user experience. Today's sanitary pads have seen improvements in design, surface materials, and core functionality.

First, product design focuses on convenience and leak protection. In 1971, Johnson & Johnson introduced the adhesive-backed sanitary pad brand Stayfree, replacing the older method of using belts to secure products, thereby offering women more convenience, freedom, and comfort during menstruation, which quickly increased its market share. In 1975, Kimberly-Clark launched adhesive-backed panty liners, competing in a segmented market. In 1984, Procter & Gamble's "Always" brand introduced the first winged sanitary pad, enhancing leak protection and product stability. Subsequently, products on the market further upgraded to 3D winged designs, using elastic edges made of rubber and non-woven fabric to provide a snug fit and prevent leaks. The Unicharm brand, "Sofy," which began in the 1960s as a feminine care brand, introduced panty-style sanitary pads in 2013, significantly addressing the issue of side leakage with its wrap-around design.

Second, surface materials focus on instant absorption, comfort, and breathability. The initial surface was made of cotton (non-woven fabric) with a flat membrane structure, offering comfort but slower absorption and less breathability. In 1983, Procter & Gamble's "Always" brand introduced a mesh surface (perforated film), improving breathability and absorption efficiency. With these innovations, "Always" grew into a competitor of Johnson & Johnson and Kimberly-Clark in the sanitary pad market. Inspired by the mesh structure, products on the market later upgraded to perforated structures (for instant blood absorption) and 3D shapes (to reduce skin contact), optimizing the cotton surface for better absorption and breathability. In recent years, as consumers have sought more natural and comfortable materials, pure cotton surface sanitary pads have been further developed.

Third, core functionality focuses on absorption and thinness. Initially, cores were primarily made of fluff pulp, known for its strong absorbency and rapid liquid dispersion. However, fluff pulp cores tend to clump and become heavy after absorbing liquid, causing discomfort. In 1979, Kao Corporation launched the "Laurier" brand, introducing the first superabsorbent polymer-based core, which can absorb liquids hundreds of times its weight while retaining moisture, thus pioneering ultra-thin sanitary pads. In 2008, Procter & Gamble introduced liquid sanitary pads, with an absorbent core made of purified water and nano-polymer particles, emulsified through technology. The core is divided into two layers: the upper layer has a high density for rapid blood absorption, while the lower layer has a low density to allow the blood to spread quickly and lock it firmly in the lower core, keeping the surface dry and preventing backflow.

Part 1

Industry Chain Structure

1

Upstream Products Affected by Fluctuations in Oil and Pulp Prices

The core materials for women's hygiene products include non-woven fabric, superabsorbent polymers, films, adhesives, and wood pulp/board. The prices of the first four raw materials are influenced by the broader oil market, contributing approximately 50% and 70% of the raw material costs for sanitary pads and period pants, respectively. Wood pulp/board, accounting for 5%-7% of the costs, is influenced by pulp prices upstream. Currently, the high volatility in oil and pulp prices is exerting pressure on the cost structure of absorbent hygiene product manufacturers. However, with the decline in oil prices observed in the fourth quarter of 2022 and the expected increase in wood pulp production capacity in the first quarter of 2023, it is anticipated that cost pressures will ease this year, potentially marking a turning point in profitability due to reduced costs.

2

Midstream Players: A Diverse and Competitive Landscape of Chinese, American, and Japanese Brands

The sanitary pad industry has relatively low entry barriers, resulting in a large number of competitors. Manufacturers are divided into those that sell under their own brands and ODM/OEM contractors, including global consumer goods giants such as Unicharm, Kao, Daio, Procter & Gamble, and Kimberly-Clark. Domestic players include Hengan International, Kingfa Sci & Tech, SCA Group, Guilin Jelene, and contract manufacturers like Haoyue Care.

3

Downstream Channels: E-commerce, Key Accounts (KA), and Distributors Covering Diverse Formats to Reach End Consumers

Brand owners primarily expand and cover the market through three types of channels: e-commerce, direct sales to KA customers, and distributors. As China's retail industry matures, offline formats are diversifying, including hypermarkets, supermarkets, and convenience stores, forming an omnichannel system that aligns with the shopping and consumption behaviors of end consumers.

Part 2

Market Size and Growth

Driven by the inelastic demand for fast-moving consumer goods, the women's absorbent hygiene products market is vast and growing steadily. From 2012 to 2021, the market size for sanitary pads in China expanded from 55.86 billion RMB to 98.71 billion RMB, with a compound annual growth rate (CAGR) of 6.5%. This growth was primarily driven by price increases, which contributed 4.4%, while volume growth contributed 2.1%.

The women's absorbent hygiene products market is already in a mature phase with high product penetration. At this stage, growth is primarily driven by the extension of usage periods and price increases. FMCG products typically have short lifespans and are consumed quickly, relying on high-frequency and repeat usage by consumers, along with market scale, to generate profit and value. Therefore, the market can be broken down into: target customer base/applicable population * penetration rate * individual usage cycle * unit price. The individual usage cycle can be further divided into daily usage * usage period.

For the Chinese women's absorbent hygiene products market:

1. Population Dividend is Waning: With the birth rate slowing, the female consumer base has stabilized. According to data from China's National Bureau of Statistics, the female population in China was approximately 690 million in 2022, with growth rates of -0.2%, 0.1%, and 0.0% over the past three years.

2. High Product Penetration: According to the 2017 China Household Paper Yearbook, sanitary pad penetration has already reached 100%.

3. Rising Individual Usage: Increased health awareness and product segmentation have led to more frequent product replacements.

4. Unit Price Increases: Consumption upgrades have spurred demand for higher-quality products and mid-to-high-end offerings. From 2012 to 2021, the average unit price of sanitary pads in China rose from 0.56 RMB per piece to 0.82 RMB per piece.

Part 3

Competitive Landscape in the Chinese Market

In the sanitary pad market, foreign brands hold a relative advantage, with local brand Hengan International leading the pack. Other domestic brands generally occupy the fifth to tenth positions. In 2021, the Japanese brand Unicharm held a market share of 12.2%, while other foreign companies such as Procter & Gamble, Kimberly-Clark, and Kao ranked third, fifth, and sixth, respectively. Among domestic companies, Hengan International is the national leader with a market share of approximately 10.3%, second only to Unicharm. Kingfa Sci & Tech is on par with Procter & Gamble and Kimberly-Clark, forming the second tier, while the third tier includes companies like Baiya Co., SCA Group, and Guilin Jelene, each with a market share of around 0.9%-1.5%.

Over the past decade, market concentration has steadily increased, with both foreign and leading domestic brands gaining market share, while smaller brands have been cleared out. From 2012, foreign brands saw an increase of about 4.5 percentage points in market share, with significant gains for Japanese companies Unicharm, Kao, and Daio, which together saw their share rise from 7.5% to 15.0%. Meanwhile, American companies, due to declines in shares of Procter & Gamble and Johnson & Johnson, saw their combined share decrease from 12.9% to 10.0%. Domestic brands saw an increase of approximately 2.5 percentage points, with individual local companies achieving modest gains of 0.3-0.9 percentage points.

First, local Chinese brands, initially in a follower position, did not achieve the first-mover advantage seen in the Japanese market. However, with the decline in product technology and production barriers, many players have entered the market and expanded regionally, intensifying competition. Additionally, some foreign brands still face instability in their localization efforts.

The rapid expansion of the female hygiene market has attracted local brands and driven technological advancements among them. From 2001 to 2009, low entry barriers meant that cost control became a crucial competitive factor. Numerous local players, focusing on mid- to low-end products, entered the market, while high-end products remained dominated by foreign brands due to technological advantages. Between 2010 and 2015, the strong growth and profitability of high-end foreign products incentivized local brands to either mimic research and development or hire key technology personnel from foreign brands to enhance their product technology and upgrade to mid- to high-end products.

The maturity of local brands' product technology, strong competition from Japanese brands, and the instability of American brands' localization efforts have created a dynamic competitive landscape, offering growth opportunities for domestic brands. On one hand, new entrants such as Cotton Era have entered the market with innovative products. On the other hand, early local companies have enhanced their product portfolios through new brand introductions and upgrades, with notable examples including Tautao Oxygen Cotton under Jelene and Free/Fei brand by Kingfa Sci & Tech.

Japanese brands, exemplified by Unicharm, have rapidly increased their market share by about 6.5 percentage points to 12.2% with their Sophie brand, leveraging designs and marketing strategies suited to Asian women and a strong Japanese product image. Conversely, American brands continue to experience instability in their localization processes.

China's female population is vast and diverse, with varying consumption needs across different segments. As of 2021, there were 690 million women in China, approximately four times the female population of the United States and twelve times that of Japan. Geographic, economic, and age differences across China contribute to the varied consumer needs among women.

Local companies often focus on regional markets and use brand differentiation to target niche segments. Early brands such as Jelene, Jieting, and ABC primarily addressed basic needs for the general female population. Subsequently, they launched sub-brands to cater to more specific segments and capture the evolving needs of young women. In the early 21st century, brands began to adopt differentiated positioning. For example, "Space 7" and "Free" were established in 2002 to target young women with ultra-thin and special-thin sanitary pads.

By 2010, consumer upgrades and a growing demand for natural and healthy products led to further segmentation. For instance, the "Princess Nais" brand under Wisdom Medical targeted mid-to-high-end female consumers with a focus on natural health. Vinda International introduced the "Vell" brand to the Chinese mainland, Hong Kong, and Macau markets, positioning it as a mid-to-high-end option. Additionally, the SecureFit brand emphasized dynamic adhesive technology to enhance comfort and fit.

3. China's Sales and Marketing Channels Are Fragmented: Leading Companies Can't Rely on a Single Core Channel to Maintain Market Share. Local Brands Can Leverage Regional and Lower-Tier Market Coverage and Multi-Dimensional Online Platforms to Break Through Market Competition

1）Offline Channels: Foreign brands are experienced in modern retail partnerships, primarily covering high-end cities in the first and second tiers. Local brands, with their regional roots, have advantages in expanding into lower-tier and distribution markets.

From 2012 to 2021, the share of large and hypermarket chains in the sanitary napkin market decreased from 69% to 53%, while traditional grocery stores also saw a decline due to reduced offline traffic, though they still held about 13.2% of the market in 2021. Additionally, non-first and second-tier cities in China have substantial market potential, with lower-tier markets accounting for approximately 70% of the population. For essential consumer goods players, broad and deep market coverage is crucial.

Regarding channel coverage, during 1993-1999, a surge of private distributors emerged. During this period, foreign brands like Kimberly-Clark entered the market through acquisitions and relied on their existing distribution networks. Between 1999 and 2003, foreign retail enterprises such as Walmart and Carrefour rapidly developed their presence in China, with local brands having less bargaining power and experience. Foreign brands quickly increased their market share, partially weakening the distributor system and lower-tier market penetration. After China joined the WTO in 2003, retail diversity and fragmented development became more pronounced, and the coverage of distributor systems became increasingly important.

Local brands often start in specific regional markets (e.g., "Space 7" in Fujian, Jelene in Guangxi, Jieting in Hubei, "Free" in Sichuan-Chongqing, ABC in Guangdong) and have a better understanding of local consumer demands and pricing attractiveness. They form close partnerships with local distributors or retailers, accumulate operational experience, and then gradually expand to nationwide retail channels. For example, Hengan International has established over 40 subsidiaries nationwide and has around 3,000 distributors, demonstrating extensive offline coverage.

2）Online Channels: China’s e-commerce market began early and has a relatively high online penetration rate. American and Japanese brands lack experiential advantages in this area.

From 2012 to 2021, the online penetration rate of sanitary napkins increased from 4.6% to 27%, with channel scale growing from 2.6 billion yuan to 26.7 billion yuan, a compound annual growth rate of approximately 30%. Online penetration in the U.S. and Japan remains in single digits, and foreign brands do not have a leading advantage in online operations. Between 2016 and 2021, major listed companies’ e-commerce channels generally maintained high double-digit growth, actively converting online traffic. Various e-commerce platforms have different user profiles and operational models, offering multi-dimensional pathways for brands with differentiated positioning. Local brands can leverage these opportunities to break through foreign brands' advantages in large KA client channels and reach end consumers effectively.

Part 4

Structural Opportunities Still Exist in the Market

Consumption upgrades and public discourse on product quality are driving the enhancement of industry standards and the upgrading of products to mid-to-high-end levels.

Consumption Trends: Rising income levels and economic development are fueling consumption upgrades. From 2013 to 2022, the per capita disposable income of Chinese residents increased from 18,310.75 yuan to 36,883 yuan. Additionally, the rise of the "She Economy" has led to increased demand from women for higher quality products and stronger brand value.

Public discourse on the quality of sanitary napkins has accelerated the strengthening of industry standards and the clearing out of small, low-quality white-label enterprises. For example, the 2015 "315 Consumer Rights Day" exposed issues with fluorescent whitening agents in ten major sanitary napkin brands (such as Whisper, Sofy, Kotex, and ABC), along with subsequent incidents involving contamination like insect eggs. These events partially changed consumers' perception of foreign brands as being synonymous with high price and high quality. At the same time, negative publicity accelerated the enhancement of hygiene standards in the industry, pushing out small manufacturers with poor production quality and providing leading domestic brands with an opportunity to reinforce their brand image.

In the context of the COVID-19 pandemic, new types of sanitary napkin products have emerged, such as medical device-grade, medical care-grade, and disinfectant-grade products. Medical device-grade products must obtain a Class I medical device registration certificate; medical care-grade products are based on industry standards jointly formulated by the China Hygiene Safety Technology Seminar and enterprises, with indicators higher than those of regular sanitary napkins under national standards; disinfectant-grade sanitary napkins are based on national standards (e.g., "Hygienic Standard for Disposable Sanitary Products"), with initial bacterial contamination levels required not to exceed 10,000 cfu/g (compared to no specific requirement for regular products), total bacterial count not exceeding 20 cfu/g (compared to ≤200 for regular products), and no detectable fungal count (compared to ≤100 for regular products).

Mid-to-High-End Upgrade Trend 1: Pants-Style Sanitary Napkins Upgrade for Enhanced Leak Protection

In response to the growing demand for leak protection, Sofy pioneered the concept of period pants, breaking away from the traditional approach of merely lengthening and widening night-use sanitary napkins. This innovation directly addresses the core need for women to sleep comfortably and securely during their periods. According to data from Huajing Industry Research Institute, the retail market for pants-style sanitary napkins reached approximately 3.5 billion yuan in 2021, with a compound annual growth rate (CAGR) of 24.1% from 2016 to 2021.

In 2022, sales of period pants on Tmall and JD.com reached 1.31 billion yuan and 360 million yuan, respectively. Over the past six years, Tmall's sales of period pants grew at a CAGR of 66.2%, significantly outpacing the growth rate of the sanitary napkin category (21.4%). Similarly, JD.com saw a CAGR of 19.8% in period pants sales over the past three years, while sales of traditional sanitary napkins declined during the same period.

Moreover, period pants are priced higher than night-use sanitary napkins, which supports profitability upgrades for companies. For example, Sofy's "Super Overnight" 420mm night-use sanitary napkin retails for about 1.9 yuan per piece, while the "Super Overnight Comfort Pants" in size M retails for about 4.25 yuan per piece, indicating a higher profit margin for the latter.

Mid-to-High-End Upgrade Trend 2: Thin Sanitary Napkins Outpace Industry Growth Due to Lightweight, Breathable Comfort

Thin sanitary napkins, particularly those under 0.15cm in thickness, are gaining popularity due to their lightweight, breathable, and barely noticeable feel. These ultra-thin products have seen significant growth in market share, with their presence in national supermarket channels increasing from 9.1% in 2014 to 18.9% in 2018, achieving an annual growth rate of over 20% each year.

According to Euromonitor data, by 2021, thin sanitary napkins (including slim, ultra-thin, and extreme thin varieties) accounted for approximately 79% of the market, with a compound annual growth rate (CAGR) of around 9.1% over the past nine years. In contrast, the growth rate for standard sanitary napkins was only about 1.5%.

Leading brands have capitalized on this trend by introducing products that emphasize a thin core. For instance, Sofy's "Barely There" and "Ultra-Thin 0.1" series, Space 7's ultra-thin and slim series, Whisper's liquid sanitary napkins, and Kotex's "Pure Cotton" and "Pawfect" series all prominently feature ultra-thin designs, catering to consumers' growing preference for comfort and discreetness.

Mid-to-High-End Upgrade Trend 3: Premium Cotton Sanitary Napkins Focus on Material Upgrades

As women's preferences shift towards products that offer a soft texture, natural fibers, and high standards of hygiene, cotton sanitary napkins have become increasingly popular. The demand for superior comfort and natural materials has driven brands to upgrade their products from traditional mesh surfaces to cotton-soft layers, which use non-woven fabrics for a softer feel. This shift has made cotton-soft surfaces the market standard.

Building on this foundation, brands have further advanced by incorporating pure cotton fibers into their top layers. Notable examples include Space 7's "Pure Cotton for Girls" series, Whisper's "North American Pure Cotton" and "Luxury Soft Cotton" series, and Kotex's "Sea Island Cotton" series.

Emerging local brands, such as the Nice Princess brand under PurCotton, have distinguished themselves by emphasizing a "100% cotton surface + cotton wings + cotton core." This focus on all-cotton products has led to rapid market share growth, with the brand ranking 13th in the Chinese sanitary napkin market in 2021, holding a 0.5% market share. This trend highlights the growing consumer preference for products that prioritize material quality and comfort.

SKU Diversification: Developing Multi-Scenario and Multi-Audience Targeting to Align with Diverse Female Needs

The trend towards SKU (Stock Keeping Unit) refinement involves tailoring products to meet the specific needs of different skin types and those requiring skin-friendly features, such as women with sensitive skin. This approach aims to cater to diverse female preferences by offering a broader range of options.

On one hand, the surface layer of sanitary napkins is further refined from the mainstream pure cotton base, emphasizing the use of natural, imported cotton and highlighting materials that are free from additives. Special fibers like silk or plant-based fibers are also incorporated to enhance skin-friendly comfort. Additionally, some products are enriched with skincare ingredients such as shea butter, moisturizing cream factors, and pearl extracts to offer added skincare benefits, creating products with unique functions.

On the other hand, products are being developed to cater to women with higher demands for absorption and breathability in specific scenarios or groups, such as office workers who sit for long periods, active and energetic young girls, or women engaged in sports. These products feature segmented absorbent core materials and breathable designs, emphasizing imported wood pulp cores, liquid cores, or pure cotton cores.

For women with higher needs for leak prevention and snug fit in scenarios like sports or nighttime movements, sanitary napkins are designed with enhanced tail and wing structures to ensure a frictionless fit. These products focus on providing a secure, no-chafe experience, particularly during activities that involve movement or during sleep, addressing the specific demands of these use cases.

This strategic diversification in product offerings not only meets the varied demands of different user groups but also strengthens brand differentiation in an increasingly competitive market.

Packaging Iteration and Upgrades: A Focus on Aesthetics, Personalization, and Professionalism

Packaging plays a crucial role in the personal hygiene market by conveying product information, assisting with convenient use, communicating brand identity, and driving consumer conversion. In this context, three major trends have emerged in packaging upgrades:

1. Aesthetic Appeal: The concept of "aesthetics-focused consumerism" is increasingly influential, particularly among younger consumers. According to Nielsen data, 64% of Gen Z consumers are more likely to purchase products with attractive packaging. For feminine care products, which primarily target female consumers, high visual appeal has become a key trend in packaging upgrades. Brands are increasingly focusing on creating visually pleasing designs that resonate with this demographic.

2. Personalization: Personalization in packaging has gained traction, particularly with the rise of popular themes among Gen Z such as anime, gaming, beauty, aesthetics, and pets. These themes have high penetration rates among KOLs (Key Opinion Leaders) who influence younger consumers. Collaborations with popular IPs (intellectual properties) and incorporating elements of these themes into packaging design have made products more appealing to younger audiences. For example, limited-edition packaging featuring beloved characters or trendy designs can significantly boost a product’s appeal and differentiation.

3. Convenience and Privacy: Packaging designs that enhance the convenience and privacy of use are becoming increasingly important. For feminine hygiene products, features that facilitate carrying and disposal, as well as sealed and discreet packaging, can enhance product loyalty. For instance, Sofy introduced a "roll-and-stick" design that keeps the used pad neatly rolled up for cleaner disposal. ABC pioneered a pull-tab aluminum packaging that is more hygienic and convenient, while Free introduced an "invisible" series designed by a French designer, featuring single-piece CC (compact and concealed) packaging that is both discreet and sanitary.

Product Upgrades Drive Market Price Increases

The trend toward packaging upgrades is closely linked to product upgrades, which have driven market prices higher. An analysis of retail pricing across the series from brands like Sofy, Seven Space, Whisper, Kotex, and Free reveals that:

·For daytime products, those with upgraded cores are priced 1.2 times higher than their basic counterparts, while products with upgraded surface materials are priced 1.8 times higher.

· For nighttime products, longer pads and menstrual pants are priced at 2 times and 4.2 times, respectively, of their basic series equivalents.

Additionally, a comparison of pricing between the Chinese market and the home markets of leading foreign brands shows significant differences. For instance, Sofy and Whisper products in China are priced at 64% and 52% of their respective home market prices for similar combination packs with comparable quantities.

This data highlights how product and packaging upgrades not only enhance consumer appeal but also justify higher pricing, reflecting the growing consumer demand for premium, well-designed feminine care products.