Menstrual hygiene products are stuck in time. These startups want to change that.

In the past year, Girija has moved to menstrual cups, which she believes offers far more comfort at half the price. “It’s reusable and saves me from skin rashes. Sometimes, I use tampons too, which are so much easier to handle on a rushed day. It feels good to have options," Girija said.

In the last few years, a host of new-age menstrual hygiene startups such as Peesafe, Sirona Hygiene, Carmesi, Nua, and Plush have come to the fore, attempting to break into the Indian market, especially among Gen Z consumers, offering a range of products beyond traditional sanitary napkins.

From menstrual cups and biodegradable panty liners to cramp relief patches and intimate washes, these startups want to create an entire ecosystem of feminine hygiene products, going beyond the offerings of legacy players such as Whisper (owned by Procter and Gamble Health and Hygiene Care Ltd, or PGHH) and Stayfree (Kenvue Inc).

While the key drivers of growth for these direct-to-consumer, or online-first, fem-tech startups have been increasing female employment and disposable incomes, extensive social media marketing has helped these brands become popular among younger consumers. This has prompted larger and established consumer goods manufacturers to take note.

Last month, commenting on the D2C brands in India’s feminine care or femcare market, Mrinalini Srinivasan, chief financial officer of PGHH, said the unorganised and small industry sector had witnessed growth albeit in niche channels.

“At a national scale cumulatively they (brands) represent less than 10% of the market. Having said that, the competitive landscape has evolved and much competition has entered the category," she said on an investor call.

“Healthy competition can always help grow the category. Our aim has been to address the common and diverse challenges faced by menstruating women across markets and make superior propositions from our diverse portfolio available to them," she said.

Complimentary, not competition

Penetration of feminine care products rests at around 60% in urban India and at under 40% in rural markets. The low market penetration is on account of a lack of awareness beyond the large and mid-tier cities, as well as poorer households continuing to use homemade cloth pads as opposed to buying packaged ones.

There is also a certain residual taboo around buying sanitary napkins and related products off retail shelves that hinders sales. This despite 48.4% of India’s population being female, per government estimates. PGHH’s internal estimates suggest that over the last three decades the market has grown from ₹34 crore in value to ₹3,400 crore.

“There is a cultural stigma around menstruation that makes people hesitant to talk about or buy products like period cups and period underwear. Additionally, the cost can be a barrier, as many people in rural communities may find these products too expensive," said Navneet Kaur, chief executive of FemTech India, a platform for connecting fem-tech industry stakeholders.

“We can’t ignore the fact that in India we still have period poverty," she added. “To address these challenges, we need to focus on solutions that improve both access and affordability."

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Given the low market penetration for menstrual hygiene products, most D2C fem-tech startups don’t intend to compete with well-established players such as PPGH, which command nearly half the market share.

Vikas Bagaria, founder and chief executive officer of Peesafe, told Mint that there is enough room for multiple players to co-exist because the Indian feminine hygiene market is under-penetrated, allowing other lesser known products like menstrual cups and cramp relief patches to thrive.

Peesafe currently derives more than half its revenue from the sale of menstrual support products like cups, pads, and intimate washes.

The founder of another consumer brand, speaking on condition of anonymity, added that players like PGHH have no reason to worry given their sheer presence and sway over the market.

“Being the biggest company in the space, their job is to really look at expanding the market. If the market penetration increases from say 20-30% to say 40%-50% or 80%, that’s where their business really lies," Bagaria said.

“They are wise enough to really focus on expanding and growing the market, making the products more accessible, and bringing innovation to the market. There’s room for everybody to play and their role is to expand the market."

Investors shying away

The menstrual hygiene has only seen modest investor interest. Over the last five years, Indian feminine hygiene startups have raised nearly $150 million in funding from venture capital and private equity firms, with 2021 seeing the highest capital inflow, according to data shared by market intelligence firm Venture Intelligence.

This is a fraction of global funding into the sector. The US fem-tech sector—or the feminine care category that includes breast-cancer screening and maternity products—raised $1.9 billion in 2021 alone, according to data by Pitchbook. More recent data wasn’t available.

“Given India’s demographic potential and the growing demand for menstrual hygiene in women’s health, it is surprising that funding for this sector remains low. Sectors like women’s health have been underfunded not just in India but globally as well because investors often prioritise sectors that promise quicker returns or larger market sizes," said Kaur of FemTech India.

“Currently, only early-stage investors are actively looking at the space. Late-stage investment is essential for overall growth but that will happen only once these (fem-tech) firms hit scale," said an early-stage consumer investor who did not want to be named. “There’s a huge gap in the women’s hygiene and wellness space that cannot be filled by 2-3 brands alone."

Destigmatising the market

For now, the menstrual hygiene startup sector’s focus is on finding ways to expand the market.

Peesafe’s Bagaria said the company is working towards destigmatising the topic of menstruation, confident that it would help improve access in the long run. A mix of strong social media and word-of-mouth campaigns could help build awareness, he said.

Legacy brands like PGHH are also working to destigmatize the market. Internal studies by PGHH reveal that one out of five girls in India drop out of school when they get their first period because they had no knowledge about it.

PGHH has been running an awareness programme called ‘Keep Girls in School’ even as it puts its marketing might behind its menstrual hygiene products.

Another key element in expanding the market is distribution, where the established brands tower over the fem-tech startups as an estimated 70% of the users of menstrual hygiene products, according to Kaur, still rely on traditional pharmacies and local shops for their hygiene products.

“Quick commerce is now solving for that and giving us a distribution moat we did not have earlier. With the advent of quick commerce, some of us brands are able to serve the consumers in the same way as the large brands," said the co-founder of a femcare company who had previously worked with several large consumer goods companies.

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Although quick-commerce penetration is currently limited to metro cities, efforts are underway to expand to Tier 2 regions. Zomato-owned Blinkit recently announced its expansion to markets such as Hardiwar, Jodhpur, Mohali, and Rohtak.

“That is what the real change is; most definitely, some of us will gain market share. We will have our loyal set of customers and continue to grow," said the femcare startup co-founder, who declined to be identified. “Does that mean that PGHH is in trouble—not really, because they still corner a large market share compared to new-age brands."