Sportswear brand On launches South Korea robot factory to tackle supply chain risk

Sportswear brand On Running has opened a factory in Busan, South Korea using robots to make running shoes and plans more robot factories in the United States and Europe as it tries to speed up manufacturing and delivery, the company said on Wednesday.

Tariff hikes imposed by the United States, supply chain disruptions and geopolitical risks are driving some retailers and brands to explore "nearshoring" manufacturing, or bringing it closer to the end consumer.

Caspar Coppetti, co-founder of On, said automation enables the brand to make shoes faster, with less environmental impact, and closer to its key markets compared to the standard footwear manufacturing model which relies on shipping finished shoes from factories in South-East Asia and China to shoppers in the US and Europe.

"The speed to market and the sustainability of it and also the fact that basically we're running out of places with cheap labour are all speaking for automation and going closer to where consumers are," Coppetti said.

On currently sources 90 per cent of its shoes from third-party manufacturers in Vietnam and 10 per cent from Indonesia, according to its latest annual report.

AUTOMATED MANUFACTURING EXPANSION

The company first unveiled its "LightSpray" marathon running shoe, made with a robot arm spraying material onto a mold to create a sock-like upper, during the Paris Olympics in 2024.

The factory in Busan, with 32 robots, is a major expansion from On's first such factory, in Zurich, which has only four and started production in July last year.

It can produce about 1,000 pairs of shoes a day, with the spray-on method condensing traditional upper manufacturing, a 200-step process across multiple factories, into a single automated process.

On, founded in Switzerland in 2010, said planned robot factories in the US would help lessen its tariff costs.

Steep tariffs imposed by the US on sportswear manufacturing hubs like Vietnam and China have hurt the industry over the past year, driving up costs.

The Supreme Court ruling against tariffs last Friday has created more uncertainty for retailers and other importers, with On's Coppetti calling for more clarity and more free trade.

In a fierce competition with bigger rivals like Nike and Adidas to produce the fastest marathon shoe - both for elite athletes and amateur runners keen to beat their personal bests - On has marketed the LightSpray as a gamechanger for its lightness.

On-sponsored athlete Hellen Obiri wore the shoes when she won the New York Marathon in November.