With production facilities around the world, Hansae designs, manufactures, and innovates casual-wear, activewear, and outdoor apparel for global brands.
Rising on the wave of global interest in K-pop and K-dramas, the Korean fashion industry has gained international recognition for its luxury street-chic style and trendy, minimalist streetwear. On the manufacturing side, we see Korean companies adding automation for agile production or innovating in fabrics for new materials. From your perspective, what unique characteristics make the Korean fashion manufacturing segment stand out?
In our industry, most companies typically begin as OEM manufacturers and gradually evolve into ODMs as they mature. It’s not just about producing and assembling products. These companies build up specialized know-how, systematize it, and develop structured databases that enable them to offer higher value-added capabilities. This evolution is more than a simple relocation of production facilities overseas, it represents a deliberate strategy of balancing globalization with localization, or what we call “glocalization.”
When we look at the global fashion manufacturing sector, it’s no exaggeration to say that over half of the world’s top ten players are Korean companies. While no official organization publishes such rankings, we review the financial disclosures of publicly listed companies and analyze available data for private firms. By comparing annual revenue, customer portfolios, and strategic capabilities, it becomes clear that Korean manufacturers hold a dominant presence in the upper echelon of the global apparel industry.
After a rapid increase in online retail following the COVID-19 pandemic, with platforms like Shein gaining popularity, the global apparel industry has entered a period of slower growth in recent years. However, experts such as McKinsey see the industry reinventing itself and identifying pockets of opportunity. As you have deep insights into this sector, how do you see the industry evolving? What opportunities lie ahead for manufacturing companies globally in the next few years?
The pandemic was a seismic event that ushered in a wave of transformation across our industry. While the circumstances have changed, many of the behavioral and structural shifts triggered by COVID-19 are still with us. One significant outcome was the explosive growth of the athleisure segment, as people became more health-conscious and prioritized comfort in their daily wear. Brands like Lululemon, HOKA, and Alo Yoga rapidly expanded during this time, and we grew alongside them as their manufacturing partner.
Looking ahead, we believe the adoption of AI will accelerate dramatically. Our company is currently collaborating with academic institutions to develop advanced AI tools for analyzing market trends. Even before the formal use of AI, we were already leveraging data from buyers like Walmart. For example, when Walmart placed an order for 2 million units across various colors, we initially distributed production evenly. But after reviewing their sales reports, we identified which colors and sizes were performing best and made real-time adjustments — reducing low-performing SKUs and scaling up best-sellers.
In this way, we’ve shifted from being a passive manufacturer to a strategic partner capable of anticipating demand, minimizing waste, and enhancing market responsiveness. The future of fashion manufacturing will be driven by this convergence of production know-how and data intelligence, and we are positioning ourselves at the forefront of that shift.
What I understand from this explanation is that the AI tools you’re using allow you to reverse and reconfigure the supply chain. If a brand previously dictated colors and styles, now the manufacturer is providing recommendations. How does this reversal change your role, and what does it mean for the industry’s future?
Every company wants to operate more under the LEAN Management style invented by Toyota, becoming more efficient and having a stronger clarified alignment of processes. In the past, manufacturers like us simply executed orders without having to think about design, colors, sizing, or demand forecasting. But today, as brands seek to improve profitability, they are offloading many of these responsibilities to vendors like us.
Take color approval as an example. Previously, each buyer handled this in-house. Now, many brands delegate this function to us. The same goes for fit approvals and other technical processes, we have developed our own internal systems for these tasks. This means that many of the roles once essential at the brand level are no longer necessary, as those functions have been transferred to us.
Brands are also increasingly asking us to handle market analysis on their behalf. While this isn’t yet universal, it’s a growing trend. In a few years, I believe many of these responsibilities will be fully integrated into the vendor side. Manufacturers will no longer be simply fulfilling orders, we’ll be proactively shaping what gets produced and how.
You mentioned earlier that the COVID-19 pandemic accelerated the athleisure boom and helped you diversify your client base. Looking forward, what do you see as the next big trend? Where do you hope to position Hansae in the next three years?
Right now, we’re intentionally avoiding putting all our eggs in one basket. Market conditions are constantly shifting; sometimes specialty stores perform well, other times discount or mass retailers take the lead. So rather than focusing on just one segment or trend, we are prioritizing balance.
Our strategy is to diversify both our product lines and client portfolio so we can remain agile and responsive across all types of retail channels. We want to be able to serve high-end brands, mass-market retailers, and everything in between. That’s how we plan to stay competitive, by staying balanced and adaptable, no matter where the market goes.
Established in 1982, Hansae has grown into a globally recognized apparel manufacturer, working with major brands including Gap, who named the company Supplier of the Year 2024, as well as Zara, Carhartt, H&M, Vans, and many more. Hansae has distinguished itself through its strong commitment to ESG, community engagement, and eco-friendly fabrics that support a more sustainable fashion industry. Could you walk us through the major milestones that have shaped Hansae’s journey? How do you view the company’s identity today?
Hansae was originally established in Korea, but as labor costs began to rise, we realized the need to explore overseas production. Our first overseas factory was established in Saipan, largely because of the quota benefits provided by the U.S. government at the time. Saipan was designated as a beneficiary of the U.S. quota system, which allowed us to enjoy tariff advantages when exporting to the U.S. market. This was a significant milestone for us, as we were able to remain competitive in a labor-intensive industry by moving our operations to more cost-effective regions.
From there, we continued to expand strategically. As countries develop and their economies grow, it becomes increasingly difficult to maintain cost-effective production. For example, we once operated factories in China, but as China matured and costs rose, we began looking for the next optimal locations. However, our decision-making has never been based solely on labor costs. We consider a broad range of factors, including cultural alignment, business environment, and long-term viability.
One of the most important decisions we made was our early entry into the Vietnamese market. We were among the first apparel manufacturers to set up operations there, long before Vietnam became the manufacturing hub it is today. Similarly, we entered Central America in the early stages of its development as a sourcing destination. These early moves helped solidify Hansae’s position as a forward-looking, globally agile manufacturer.
Today, more than 50% of your production remains in Vietnam. You’ve also invested heavily in expanding your Guatemala facility and acquired Texollini in the U.S. for fabric sanitization. What was the reasoning behind this investment and reorganization? Why did you decide to nearshore or onshore production in the U.S.?
The driving force behind these decisions is the need to reduce lead time and improve cost efficiency, two of the top priorities for our buyers today. Shorter lead times mean greater flexibility, more accurate demand forecasting, and less unsold inventory. To achieve this, it’s essential to integrate the production of both fabric and finished garments within the same country. Keeping the same country of origin (COO) simplifies the supply chain and improves responsiveness.
Although Hansae is a Korean company, we are a member of the American Apparel & Footwear Association (AAFA) and maintain offices in the U.S. and other key markets. This global presence allows us to stay closely connected with our buyers and their evolving needs.
The U.S. government and AAFA have both been strong advocates for nearshoring, particularly to Latin America. However, the challenge in this region has been the limited availability of diverse fabrics, making it difficult to scale production at a level comparable to Asia. We believe that by offering a wider variety of fabrics locally, at competitive prices and with shorter lead times, we can unlock major new opportunities in this region.
How do you think this onshoring strategy will translate into new opportunities? Do you anticipate gaining access to new clients or further strengthening your position in the U.S. market? How do you see this creating a domino effect?
The AAFA and U.S. government, as well as many of our buyers, have repeatedly emphasized the importance of onshoring and regional diversification. One major factor driving this trend is the shifting geopolitical landscape. The United States is clearly moving away from reliance on a second superpower, particularly in terms of manufacturing, and there is a growing push to reduce dependence on China for fabric and apparel production.
This geopolitical shift is creating entirely new dynamics in Latin America. Not only are our existing buyers increasing their interest in the region, but we are also seeing demand from new clients who are looking to diversify their sourcing strategies. Hansae is well-positioned to meet this demand with agile, localized solutions that can adapt to both economic and political shifts.
In addition, there are growing concerns surrounding ethical sourcing — especially in relation to Xinjiang cotton in China. The situation in the Xinjiang Uyghur region has drawn significant international criticism over human rights issues, including concerns about forced and child labor. Until recently, it was difficult to trace the origin of cotton beyond paper documentation. But now, new technologies are emerging that can analyze cotton at the fiber level to determine its geographic origin. These tools have made it possible to enforce stricter sourcing bans. As a result, many companies are now avoiding Xinjiang cotton entirely.
Hansae’s strength lies in the fact that we do not concentrate our production in a single country. Instead, we operate manufacturing facilities across Asia and Latin America. Just last year, we launched a new factory in El Salvador and are actively considering further expansion in the region. By offering multiple COOs, we provide our clients with greater flexibility, enabling them to adapt their sourcing strategy according to compliance requirements, tariff benefits, or lead time advantages.
A few years ago, the Financial Times published a major report on apparel manufacturing in the U.S. and highlighted many of the dynamics you’ve described. Are you currently seeking new partners or clients in the U.S.? What trends are shaping your approach, and if so, what types of partnerships are you looking for?
We are always looking for opportunities to grow. As long as there is room for expansion, we are eager to pursue it. One of the most exciting developments for us is the construction of a fully integrated facility in Guatemala, from yarn to finished fabric. We’re investing approximately $300 million in this project, which represents a major leap forward for our company.
Unlike other companies that operate separate facilities for spinning, dyeing, knitting, and garment production — often spread across multiple countries — we are consolidating all of these processes in a single location. This level of vertical integration will allow us to dramatically reduce transportation costs, streamline operations, and improve our overall environmental footprint.
The facility will feature cutting-edge technology and adhere to the highest sustainability standards. We are also working to introduce new textile innovations in this region, including the capability to produce advanced fabrics that were previously unavailable in Latin America. We believe this initiative will be a quantum leap for our business and a game-changer for the region.
I’d like to shift the focus to the design aspect, particularly your new design lab in partnership with Hongik University. Interestingly, we had a similar conversation with the President of Hongik University. In this lab, you directly educate, inform, and showcase the evolution and future of the fashion industry. What core guidance do you offer students to help them better prepare for the future of fashion? Is this a special partnership, or do you plan to expand it to include institutions in France or the U.S.?
Allow me to explain why we chose this approach in more detail. Our company employs many graduates not only from Korean universities but also from top fashion schools overseas, including FIT and other prestigious institutions in the United States. However, like many CEOs have noted, even after graduating from these renowned programs, most new hires still require six months to a year of additional on-the-job training before they can perform at the level we expect.
From my perspective, that represents a lost opportunity for both the students and the universities. That’s why we believed it would be far more effective if students received more practical, hands-on training during their academic years. This led to our partnership with Hongik University, where we developed a set of specialized courses under the name “Global Fashion Specialist Program.” Through this program, students receive training in areas such as merchandising, production, and both technical and general fashion design.
While the program currently operates on the Hongik University campus, starting next year we plan to open it to students from other universities as well. Our ultimate goal is to foster a stronger pipeline of globally competitive fashion professionals trained right here in Korea.
We’ve been talking about your company’s interest in innovation and sustainability — whether through special materials or ESG practices. Could you elaborate on what sustainability means for Hansae today, especially given that it’s becoming a regulatory requirement as much as a marketing imperative?
Because we operate primarily in the B2B space, we’ve historically had less need to advertise eco-friendly initiatives directly to consumers. However, even in a vendor-driven business model, Hansae was one of the first in the industry to voluntarily launch its own sustainability initiative.
That initiative is called “10% for Good.” Under this program, whenever a buyer selects eco-friendly fabrics or sustainable production methods, we donate 10% of the profits from that order to environmental organizations or reinvest them into sustainability-related causes. This program, which we began in 2019, reflects our proactive commitment to the environment — something not often expected from manufacturers, but which we take seriously.
What sets us apart is that this initiative is self-driven. Most vendors only engage in ESG activities under pressure from buyers. But at Hansae, we have built our own independent ESG strategy. For instance, we’ve invested in companies like Recover, which operate closed-loop recycling systems. Recover pursues is garment-to-garment upcycling. They take used/disposed garments to shred, dissolve, and re-weave into yarns and fabrics to produce another garment.
In addition to that, we’ve supported organizations that collect plastic bottles from the ocean and recycle them into usable materials. Our internal environmental goals are also ambitious. For example, thanks to our ongoing efforts to reduce electricity usage, we were able to save enough energy in one year to power all of New York City for one day, 17 hours, and 30 minutes. It’s a symbolic but powerful measure of our progress.
Yet sustainability for us also extends to social responsibility. In Vietnam, where our main production facility is located, we provide health and wellness education for female workers. Since 2017, we’ve also donated 10,000 books annually to elementary schools across Vietnam as part of our commitment to community development.
Looking three to five years ahead, where do you see Hansae’s growth coming from? Do you envision it as primarily U.S.-driven, or are you aiming to become a global leader across more regions?
As long as people exist, they will wear clothes, so there will always be demand in the apparel industry. What’s changing is how garments are made. Producing better-quality apparel, more efficiently and at lower cost, is now the central challenge. That’s why we’re investing heavily in automation and other technologies — often ahead of our competitors. It’s a critical part of staying competitive.
Apparel isn’t just one category. Beyond athleisure and sportswear, there are workwear, casualwear, sleepwear, and more. Hansae already manufactures across a wide range of these categories. One area where we’re not yet heavily involved is outdoor and hiking apparel, but we see substantial potential for growth there. We’re also re-entering categories like swimwear, where we see renewed demand. Overall, the activewear segment is expanding rapidly, and we plan to grow alongside it — broadening our product range and entering new categories through innovation.
You’ve mentioned that Hansae is always hungry for new opportunities and open to entering any segment of the apparel industry. Looking ahead, which regions beyond the U.S. do you see as the strongest growth opportunities for your company?
Continued growth is essential for Hansae, and this is something I often emphasize to our employees. To me, a company is like a living organism. Aging begins when growth stops. If a company isn’t evolving, it begins to decline. To stay vibrant and relevant, we must continuously expand and adapt.
While the U.S. remains a major market for us, we’re also actively expanding into Europe. In addition to our office in New York, we recently opened a new office in Barcelona. There, we’ve hired local experts to work more closely with European buyers, including ZARA, H&M, MANGO, and PRIMARK.
We are also strengthening our position in Japan, where we are in the process of establishing a dedicated design office to better serve the local market with tailored styles. Moving forward, we intend to collaborate more closely with major players in each region and expand our global apparel manufacturing capabilities accordingly.
You mentioned earlier that Hansae is entering the swimwear and outdoor categories. As a consumer, where and when should I expect to find your products on store shelves?
We’ve already begun full-scale production of swimwear and are actively manufacturing various types of activewear. Our next step is to further strengthen our capabilities in the activewear space and continue scaling up production.
As for outdoor apparel, it will take a bit more time to ramp up. We are continuously seeking potential and are discussing on developing the potential with our clients. When I mentioned outdoor earlier, it was to highlight that we are exploring all potential categories. Even now, we manufacture a diverse range of products, and we’re steadily expanding both the scope and scale of our offerings.
What would you most like readers to take away from your message in this report?
What I’d like readers to remember is that Hansae is already a truly global company. We employ people from a wide range of nationalities, and although we began by opening offices in Asia, we have since expanded into the U.S., Europe, and Latin America. In each region, we actively hire local talent, and we expect our global hiring efforts to continue growing.
Internally, we operate with the mindset that our headquarters doesn’t need to remain in Korea. If operational efficiency can be better achieved in Spain, the U.S., Vietnam, or Guatemala, we’re open to that possibility. To succeed in the modern fashion industry, it’s essential to go beyond national boundaries and embrace a global mindset. This approach not only enhances our corporate culture but also fuels long-term, sustainable growth.
All of our meetings that involve international employees are conducted in English, and we pride ourselves on fostering an inclusive, collaborative environment. As a global ODM company, Hansae is committed to attracting top fashion talent from around the world. For example, last year, ten fashion students from North Carolina State University visited our factory in Vietnam. We accompanied them on the tour, and many expressed strong interest in applying for our internship programs.
One final point I want to stress is that Hansae is not just an ODM company. We have strong R&D and in-house design capabilities, including advanced 3D design technology. Our design strength is a major reason we continue to work with top global brands — and we plan to build on that strength in the years to come.
