South Korea's Textile Export Value Falls Below $10 Billion Mark, Industry Transformation Faces Growing Pains

In 2025, South Korea's textile industry encountered a symbolic setback. According to preliminary statistics released by the Korea International Trade Association, the Ministry of Trade, Industry and Energy, and other institutions between January 11 and 12, 2026, South Korea's export value of textile fibers and products in 2025 was approximately $9.8 billion, falling below the $10 billion mark for the first time since 1987. This figure not only reflects the current severe external market environment but also profoundly reveals the structural challenges faced by South Korea's textile industry in global competition and industrial upgrading.

I. The Dual Pressures Behind the Data: Loss of Price Competitiveness and Market Erosion

The drop below $10 billion in export value is the result of a combined decline in both volume and price. The high-value-added strategy long relied upon by South Korea's textile industry has failed to deliver under multiple pressures:

1. Sustained Decline in Price Competitiveness: Faced with the maturity and cost advantages of supply chains in countries like China, Vietnam, and Bangladesh, the price disadvantage of South Korean textiles in the low-to-mid-range market has become increasingly apparent. Even in the high-end functional fabric sector, it faces pressure from rapid technological catch-up by competitors such as China.

2. Deep Contraction in Traditional Markets: Demand from its major export markets—China, the United States, Japan, and Vietnam—weakened simultaneously. Among these, exports to its largest market, China, decreased significantly due to the strengthening of China's domestic supply chain and economic factors. In Southeast Asian countries like Vietnam, South Korean fabrics are also being gradually replaced by localized production.

3. High-End Transformation Falls Short of Expectations: Although the South Korean industry has for years been committed to transitioning towards high-tech, high-performance, and eco-friendly materials (such as bio-based fibers, carbon-neutral technical textiles), the scale of growth in new markets has not yet been able to fully compensate for the substantial gap left by the decline in traditional bulk commodity exports.

II. Underlying Challenges: Cost Structure and Innovation Bottlenecks

Analysis from the Korea Federation of Textile Industries and related think tanks points out that the causes of the crisis are complex:

·High Endogenous Costs: Soaring domestic costs for labor, energy, and environmental compliance in South Korea continue to erode the international competitiveness of its manufacturing sector.

·Lagging Innovation Commercialization: Despite considerable investment in R&D, the speed and efficiency of translating laboratory technologies into globally price-competitive commercial products lag behind competitors.

·Impact of Supply Chain Restructuring: The trend towards regionalization and shortening of global supply chains has challenged South Korea's previous model of "importing raw materials - processing for export." The relocation of some downstream garment manufacturing segments has consequently reduced orders for its upstream fabrics.

III. Industry Response and Future Outlook

Faced with this historic decline, the South Korean government and industry are urgently discussing countermeasures. Possible measures include:

·Targeted Policy Support: Increased subsidies for cutting-edge technology R&D in the textile industry are expected, along with greater financial and tax support for exporting companies.

·Market Diversification Exploration: Actively exploring emerging markets in the Middle East, Central Asia, etc., and leveraging the influence of the Korean Wave (Hallyu) to promote the integration of fashion brands with fabric exports.

·Full Focus on Ultra-High-Value-Added Sectors: Concentrating resources on cutting-edge industrial textile sectors such as smart wearables, healthcare, and aerospace, striving to establish an irreplaceable advantage in these high-barrier fields.

This fall in export value below $10 billion marks the end of an era for South Korea's textile industry. It serves as a warning that relying solely on technological upgrading, while detaching from cost control and market rhythms, makes it difficult to maintain export scale. The future of South Korea's textile industry will depend on its ability to find a new balance between cutting-edge innovation, cost control, and agile market response.