President Lee Jae-myung recently noted that "domestic sanitary pad prices are about 39% higher than overseas," pointing to a monopolistic-oligopolistic market structure, and the issue of sanitary pad prices is emerging as a social flashpoint.
Sanitary pads are a representative daily necessity used every month by more than half of the female population, but some note that there has not been sufficient public discussion about how prices are set and what distribution structure they go through.
ChosunBiz on the 2nd met with Choi Cheol, a professor of consumer economics at Sookmyung Women's University, Kim Do-jin, CEO of sanitary pad manufacturing startup "Happy Moonday," and Gyeonggi Provincial Assembly member Yoo Ho-jun, who pushed to revise the Gyeonggi Province local government ordinance to support menstrual products for female teenagers, to examine structural problems in the domestic sanitary pad market.
Experts said that an oligopolistic structure in which the top three companies—Yuhan-Kimberly, LG Unicharm, and KleanNara—hold more than 80% of the market, along with distribution margins reaching about 40%–50%, are key drivers of price increases.
They emphasized that a D2C (Direct to Consumer) model in which manufacturers sell directly to consumers, or a subscription method, could be alternatives, and said public or alternative distribution channels that minimize distribution steps should be expanded to restore market competition and create room for price cuts. The following is a Q&A.
—How domestic sanitary pad prices compare with overseas levels.
Kim Do-jin, CEO of Happy Moonday (hereafter Kim Do-jin) "It is hard to simply compare domestic sanitary pad prices with overseas and say they are 'unconditionally expensive.' The Korean market already has products across various price bands: low, mid, high, and premium. Based on medium-size pads, the per-unit price is 100–300 won for low-priced products, 400–600 won for mid-priced, 600–800 won for high-priced, and around 1,000 won for premium products. Despite the range of prices, consumers feel they are 'expensive' because sanitary pads are a necessity, not a choice. A preference for higher-end products in particular has had an impact."
Choi Cheol, professor of consumer economics at Sookmyung Women's University (hereafter Choi Cheol) "Considering that they are daily necessities, it is hard to see the prices as cheap. Sanitary pads are not a discretionary consumer good but an item that must be used. So consumers are more likely to perceive them as burdensome for a daily necessity rather than as reasonably priced."
—Main factors that determine sanitary pad prices.
Choi Cheol "We need to look at the characteristics of consumers in Korea. Consumers in Korea tend to place a high value on hygiene and health, so they choose relatively higher-quality products more often. They perceive sanitary pads not as a simple consumable but as a 'product for my body and health.' Even though they are daily necessities, consumer involvement is very high, and demand does not drop much even if prices rise. Economically, it is a market with low price elasticity."
Yoo Ho-jun, Gyeonggi Provincial Assembly member (hereafter Yoo Ho-jun) "Concerns about safety grew after past controversies over harmful substances. Because sanitary pads remain in contact with the skin for long periods, trust and safety have a big influence on purchase decisions."
—There are claims that distribution margins are excessive.
Kim Do-jin "Marketing costs and distribution fees account for a large share of the cost structure of sanitary pads. In particular, the cost burden rises sharply the more you enter large distribution channels. Large channels typically demand fees of 40%–50%. If a consumer pays 1,000 won, nearly half goes to distribution costs. Without changing this structure, it is hard to cut prices."
Choi Cheol "Sanitary pads are a daily necessity that cannot be skipped. If a 50% distribution margin were added to rice or essential ingredients, it would become a social controversy. It is not desirable for prices to be substantially inflated at the distribution stage for sanitary pads, a daily necessity."
—There is also criticism of an oligopolistic structure in which the top three companies—Yuhan-Kimberly, LG Unicharm, and KleanNara—hold 80%–90% of the sanitary pad market.
Choi Cheol "It is hard to view a situation positively in which a few corporations take most of the market share in a daily necessities market. It can be seen as a market failure. In such a structure, price and quality competition are unlikely to function properly. The market works normally only when choices increase for both producers and distribution."
Yoo Ho-jun "Altteul gas stations were introduced because of the oligopoly among refiners in the past. The sanitary pad market is similar. Public intervention is needed now to resolve a structure in which a few corporations dominate the market."
—Ways to improve the current market structure.
Kim Do-jin "If small and midsize manufacturers get opportunities to secure a certain volume, the chances increase that price competition and product innovation will occur simultaneously. First, D2C models in which manufacturers sell directly, or subscriptions, are realistic alternatives. Selling directly through their own online malls can reduce the high fees charged by major distribution channels such as Coupang, E-MART, and Olive Young. Subscriptions also lower distribution fees. However, for small businesses, building enough awareness to drive subscriptions is not easy."
Choi Cheol "As the oligopolistic structure hardened, quality products from small and midsize companies or startups had few chances to reach consumers. Consumers tend to read brand and price as signals of safety and quality. Sanitary pads are 'quasi-drugs' managed by the Ministery of Food and Drug Safety, and basic safety management is implemented institutionally. We need to go a step further and consider ways to objectively verify diverse products and disclose information. That would enable rational consumption in which consumers choose lower-priced products of comparable quality even if brand awareness is low."
Yoo Ho-jun "To enable more small businesses to enter the market, the structure that concentrates distribution bargaining power in large companies must be eased. We need to solve the structural problem in which small manufacturers or innovative companies with price competitiveness hit distribution walls. The public sector needs to create, at least in part, alternative structures that bypass distributors or minimize margins."
—After the president's comments, the top three companies moved to expand mid- to low-priced products.
Choi Cheol "An oligopolistic market is a typical market failure situation. In such cases, a government signal is meaningful. But excessive intervention, such as price controls, can cause side effects like supply contraction. We need policies that induce market principles to function."
Kim Do-jin "I hope this discussion becomes a chance to improve price, distribution, and product competitiveness together, rather than a one-off response. It should not end with the launch of showy mid- to low-priced products. If small and midsize manufacturers get opportunities to secure a certain volume, the chances increase that price competition and product innovation will occur simultaneously. Then the overall strength of the market will rise together."
Yoo Ho-jun "Menstrual products have already been exempt from value-added taxes for more than 20 years. That means the government has long recognized that sanitary pads are not discretionary consumer goods but essential daily necessities for women. There has been a social consensus that taxing them is inappropriate in terms of women's health and hygiene and the guarantee of basic living rights. Now it is time to fix the production and distribution structure of sanitary pads."
—Public distribution or alternative distribution models are being discussed as solutions.
Yoo Ho-jun "There is a public distribution corporation called 'Gyeonggi Province Company.' It was established through joint investment by several regional economic organizations, including Gyeonggi Province and the Gyeonggi Federation of SMEs. It supplies products at prices about 30% lower than sanitary pads sold on the market. This is possible because it goes through almost no intermediate distribution steps, minimizing distribution margins. It is a public-leaning distribution channel that sells a variety of products produced by local small and midsize companies, not just sanitary pads, and can serve as an alternative to the existing private distribution structure."
Choi Cheol "The very existence of a public distribution channel puts downward pressure on prices at existing distributors. If the same product can be bought for 1,000 won in one channel and 500–600 won elsewhere, consumers will naturally choose the cheaper place. That helps restore market competition. At the same time, the government needs to work on shifting consumer perceptions and creating an environment where diverse products can be placed among the options."
Kim Do-jin "I hope the voices of on-the-ground operators and young female consumers in their teens and 20s are reflected in the government's policy design process. Only then can innovation continue and a sustainable structure be built."