Busan footwear sector shifts focus to proprietary brands

The footwear industry in Busan is undergoing a structural realignment, contracting in physical scale but increasing in corporate value as manufacturers move away from traditional original equipment manufacturer (OEM) and original design manufacturer (ODM) models towards proprietary brands and digitalised manufacturing.

Over the past decade, the number of footwear manufacturers in the region has nearly halved, falling from more than 200 to 109. However, the remaining enterprises have demonstrated increased financial resilience. Average shipments per company rose 39.6 per cent, from 4.8 billion won in 2015 to 6.7 billion won in 2024. Over the same period, the average value-added per company climbed 31.3 per cent, moving from 1.6 billion won to 2.1 billion won, indicating an industry-wide technical upgrade.

A central element of this transition is the Advanced Footwear Convergence Hub Center, which opened in 2019 following an investment of 43 billion won. The six-story facility houses approximately 200 personnel from 31 companies across finished products, materials, components, and design, including tenants such as K2 Korea, Kolon Industries, and Hwaseung Industries. Aggregate revenue for these tenant companies grew 8.1 per cent, rising from 3.54 trillion won in 2024 to 3.84 trillion won in 2025.

The facility operates an internalised, one-stop value chain that clusters components, materials, design, and textiles to manage the entire process from development to distribution. Kim Kyung-hoon, head of the Advanced Footwear Convergence Hub Center, noted that the facility provides collaborative space with skilled technology companies at rents 70 to 80 per cent below surrounding market rates, while supporting joint development costs and a shared-growth fair.

The center currently faces an occupancy challenge, with rates softening from 100 per cent at opening to the 80 per cent range following the relocation of a global firm’s development center to China. Management is currently reviewing plans to convert the vacant space into an open innovation base.

Concurrently, the regional sector is advancing its digital transformation through the 9.08 billion won Digital-Based Rapid Footwear Manufacturing Support System Establishment Project. Managed by the Korea Institute of Materials Convergence and the Busan Techno Park since 2023, the initiative supports three-dimensional modeling, automated digital upper production, and big-data-based product development to shorten prototype timelines.

As part of this digital infrastructure, a specialised digital transformation room operates on the third floor of the hub center, featuring automated 360-degree product photography equipment that operates significantly faster than manual methods. The facility also serves an educational function, training approximately 2,000 students annually in modern manufacturing techniques.

The technological shift has also extended to sustainable materials within the global supply chain. Local materials specialist Asems supplies its proprietary hot-melt adhesive material, Ultranet, to a global sportswear brand, with the material scheduled for trial application on football boots during the 2026 World Cup. The mesh-structured material, which improves breathability and flexibility compared to traditional film adhesives, was originally developed with early-stage research and development support from Busan Techno Park.

To sustain this industrial pipeline, a new knowledge industry center specialising in logistics and startups is scheduled for construction between 2025 and 2029. Backed by a 28 billion won investment from the Ministry of SMEs and Startups—comprising 16 billion won from the national budget and 12 billion won from city funds—the center will connect with the existing hub to form an infrastructure ladder spanning incubation, development, manufacturing, marketing, and logistics.

According to center leadership, the new development addresses a critical gap by providing transitional space for growing startups. Illustrating the regional interest in the sector's modernization, a newly launched six-month training programme for prospective founders has attracted applicants nationwide, including from Seoul and South Chungcheong Province.