BUSAN, South Korea - In 1980, about three million people lived in Busan and, according to the Footwear Industrial Promotion Center of Busan, roughly one million of those worked in the shoe industry. It seems everyone must have been getting some kind of discount at ABC Mart.
In 1977, the first pair of Nike shoes rolled off an assembling line in the Sasang-Gimhae area of what was then known to the world as ‘Pusan’. In the first month, the Sam Hwa factory produced 10,000 pairs of shoes. By the end of the year, it was producing 100,000 pairs. That was just the beginning of the Nike factories that produced footwear in the city.
From the mid-70s until the mid- to late-80 , Busan reigned as the shoe capital of the world. Everyone set up factories here. From big players like Adidas, Converse and Reebok to no-name brands that supplied department stores and small-time labels all over the world. It is estimated that, at its peak Busan, produced 80 percent of shoes that were manufactured worldwide. The other 20 percent originated in Taiwan and China, respectively.
Busan ruled more than just the world of shoe manufacturing. They also held court over the materials that went into shoes. Before a portion of those million shoe industry workers put the shoes together, the other portion found themselves busy creating the components for the footwear. In shoe lingo, components include things like outsoles, insoles, uppers, lowers, eyelets, tongues, shoelaces and more. In many cases, this meant designing them out of raw textiles.
Eventually, cheaper labor markets evolved and, by the end of the 80s, Busan unwillingly relinquished its position as the shoe leader of the world. Taiwan and China flip-flopped factory ratios with Busan. However, while factories left Busan, ownership of the factories did not. Korean companies simply moved to the lower labor cost cities and opened new facilities. These days, Korean and Taiwanese companies actually own close to 90 percent of the shoe factories in China.
1990 – The year the shoe industry in Busan nearly died
The Korean government noticed the manufacturing base fleeing and took action. Realizing they could not compete with Chinese labor prices, they chose other ways to keep the industry alive. They did this through tax incentives, but also by pumping money into research, development and education. One of the more interesting things was the opening of the Korea Institute of Footwear and Leather Technology.
Located in Busan, the âShoe High School,’ enrolled students for reading, writing, arithmetic and shoes, shoes and more shoes. The school offered a rigorous 3-year program with state-of-the-art equipment which prepared students for direct entry into the shoe industry or for entrance into the even more rigorous Shoe College.
The government’s strategy succeeded. By the turn of the century, Korea, specifically Busan, began establishing itself as a new kind of industry leader. Now, according to an industry insider, Korea is known for producing (designing) the best materials in the world.
The company Korea-based company, Treksta, which is headquartered here in Busan, stands as one shining example of this new dominance. Treksta distributes the number two selling outsole in the world. They also designed the world’s first lightweight hiking shoe and are now the number one selling hiking shoe in Japan and Korea. Treksta can be found in 30 countries and ranks number fifteen worldwide in sales. They only recently entered the U.S. market.
When asked about Treksta’s long-term goals, company president Kwon Dong-chil confidently expressed the footwear company’s plans: To be ranked in the worldwide top five by 2014, and the number one by 2016, he said.
This story was originally run in October of 2010