On Launches South Korea Robot Factory to Mitigate Supply Chain Risks
Sportswear brand On Running has inaugurated a state-of-the-art factory in Busan, South Korea, utilizing robotic technology to manufacture running shoes. This move comes as the company looks to streamline its production and enhance delivery times. The announcement was made on Wednesday.
Manufacturing Amid Supply Chain Challenges
In response to recent tariff hikes imposed by the United States and ongoing supply chain disruptions, the brand is increasingly considering “nearshoring,” which involves relocating manufacturing closer to its consumer base. Caspar Coppetti, co-founder of On, emphasized that automation allows for faster production and a reduced environmental impact. The shift aims to enhance accessibility to key markets, moving away from the conventional manufacturing model reliant on shipping from Southeast Asian and Chinese factories.
Coppetti noted, “The speed to market and sustainability, as well as the diminishing availability of inexpensive labor, underscore the need for automation and localized production.”
Currently, On sources approximately 90% of its footwear from third-party manufacturers in Vietnam and the remaining 10% from Indonesia, as detailed in its annual report.
Expansion of Automated Manufacturing
The Busan factory features 32 robots, marking a significant enlargement from On’s initial automated facility in Zurich, which began operations last July with only four robots. The new facility has the capacity to produce around 1,000 pairs of shoes each day. By employing the innovative spray-on method, the factory simplifies traditional upper manufacturing—a process typically involving 200 steps across multiple production sites—into a singular automated operation.
Since its inception in Switzerland in 2010, On has emphasized innovation in footwear technology. Future plans for robotic factories in the United States are aimed at reducing tariff expenditures linked to athletic shoe manufacturing.
Impact of Tariffs and Legal Developments
The increase in tariffs on items manufactured in countries like Vietnam and China has significantly affected the sportswear sector, inflating costs for companies such as On. Recent legal developments, including a Supreme Court decision concerning tariffs, have contributed to a climate of uncertainty for retailers and importers. Coppetti has urged for clearer regulations and advocates for more favorable trade conditions.
Competing for Market Leadership
In a competitive market dominated by large players like Nike and Adidas, On is striving to establish its position. The brand’s latest product, the LightSpray marathon running shoe, has been marketed as a revolutionary entry in running performance gear. On-sponsored athlete Hellen Obiri wore the shoe during her victory at the New York Marathon in November, underscoring the product’s potential to appeal to both elite and recreational runners.
The launch of the Busan factory represents a strategic step for On in navigating the challenges facing the sportswear industry today and highlights the brand’s commitment to innovation and sustainability as it adapts to a changing market landscape.
For insights into the evolving landscape of sportswear manufacturing, see our previous report on the impacts of tariff adjustments on the garment industry.
Published on 2026-02-25 10:30:00 • By FAME Delivered News Desk • Category: Lifestyle