P&G Korea has decided to withdraw from the sanitary napkin market in 30 years after entering the Korean market. The company’s management has judged that there is no merit to continue the business in Korea.
According to the hygienic band industry on Dec. 6, P&G Korea halted Whisper Sanitary Napkin production lines at Cheonan Factory at the end of last year. The factory had three lines for logistics, production, and repackaging of imported napkins. Among them, the production line was suspended. On top of that, the line for repackaging of napkins imported from China stopped operation as of July.
Business uncertainty is blamed largely for P&G Korea’s closedown of the sanitary napkin business in the Korean market. The sanitary napkin business accounted for less than 5% of the company’s total sales in Korea. More than 90% of sales come from fabric softeners and detergents. Experts say that P&G Korea believed that maintaining the napkin business in the face of prolonged sluggish sales would have a negative impact on its whole business operations.
After entering the Korean market in 1989, P&G occupied more than half of the Korean sanitary napkin market thanks to the immense popularity of Whisper in the 1990s. But Yuhan Kimberly and LG Unicharm had a blitz on the hygienic band market, ramping up their market shares with highly comfortable and functional products.
The Korean companies’ rise badly hurt the pride of P&G that had not missed first or second place in sanitary napkin markets in Europe, the U.S. and Asia. In Korea, its market share dropped to a single-digit. According to Kanto Worldpanel, an online and offline market research firm, Yuhan-Kimberly ranked first with a 42.6% share in the Korean sanitary napkin market in the first quarter of 2018, followed by LG Unicharm (19.7%), KleanNara (5.5%) and P&G Korea (5.1%).
In addition, as sanitary napkins and diapers have been sold at low prices via a parallel import system since 2010 when the proportion of online distribution of household goods increased sharply, P&G Korea’s sales have further dropped.
Furthermore, the detection of carcinogens in sanitary napkins which kindled a social firestorm last year is believed to have contributed to P&G Korea’s decision to withdraw from the Korean sanitary napkin market.