Prospects for the textile and clothing industry in south korea

The textile and clothing industry in South Korea played a major role in the country’s initial industrialisation but it has subsequently been eclipsed by other industries, notably automotive and electronics. Moreover, there has been a notable decline in the number of textile and clothing operations and employees in the industry in recent years. This stems in the main from rising domestic costs, which have had a negative impact on competitiveness in domestic and export markets, and from labour shortages—as more highly paid employment opportunities in other manufacturing industries have evolved. The position has been exacerbated by growing competition from the textile and clothing industries in other Asian countries with far lower manufacturing costs. Even so, the textile and clothing industry in South Korea remains important and covers a wide range of vertically integrated activities. In 2018 it comprised a total of 5,195 enterprises and provided employment for 136,678 people. In addition, many more people were employed in support services such as marketing, logistics and retailing. The textile and clothing industry is still a substantial exporter—especially in textiles, where there is a significant trade surplus. In world terms, South Korea is the seventh largest textile exporting country although in clothing it ranks only 35th. The strength of its textile exports stems from the fact that it has an extensive synthetic fibre industry whose output is more than sufficient to meet domestic requirements. The synthetic fibre industry was developed as South Korea does not have any significant domestic sources of natural fibres. However, although textile and clothing exports remain strong, they have been falling in recent years. Between 2014 and 2019 they declined by 20.3% to US$12.48 bn as textile exports fell by 21.2% to US$10.74 bn and clothing exports fell by 14.2% to US$1.74 bn. At the same time, textile and clothing imports rose by 13.7% to US$16.14 bn. Looking to the future, the textile industry has embarked on a strategy of concentrating on the development of new textile materials with the aim of increasing the added value of its exports. In particular, the focus will be on smart fibres, nanofibres, fibres for healthy lifestyles and sustainability, and high-tech super fibres such as aramid fibres and carbon fibres for use by the automotive, shipbuilding and defence industries. To help the industry to achieve its export target, South Korea has signed free trade agreements (FTAs) with many major countries in the world. © Textiles Intelligence Limited 2020.