Asian Pacific uptake of radio frequency identification (RFID) to track products was worth €126.6 ($170.3) million in 2006, with the sales of the technology expected to reach €480.5 ($646.3) million by 2013, according market analysts.
The analysts, Frost & Sullivan, said the growth will be driven by the success of increasing numbers of RFID projects, with end users progressively keen to integrate the technology into their supply chains.
RFID technology is helping to transform logistics by providing a means of tracking and tracing individual products throughout the supply chain. Integrated RFID systems can help automate processes as well as reduce the risk of counterfeiting.
Richard Sebastian, Research Associate with Frost & Sullivan, said pressure from end users outside the region was playing a significant role in the growth of the technology.
"Presently, the key driver for RFID adoption in the supply chain for the Asia Pacific market is compliance with mandates set by retail giants located in the United States or Europe," he said. "Once end users begin to realize that RFID's value extends beyond mere mandate compliance, this technology is expected to experience large-scale adoption."
Meanwhile, Asian Pacific companies and organizations are expected to set new mandates once RFID is introduced into their own supply chain, which will both directly and indirectly drive adoption, according to the analysis.
Once the different manifestations of RFID are ratified progressively towards a single standard, the feasibility for end-user adoption will increase.
The high initial cost of RFID, including tags and readers, meant that investment in the technology was limited to high value goods. However as the price continues to fall, more operations will be able to afford to invest, ensuring the Asian Pacific market for RFID thrives in the new few years, according to Frost & Sullivan.
"To build on this greater interest in RFID, all parties involved with it need to better educate end users about its actual benefits, without over-hyping it," said Sebastian. "Although end users more or less understand what RFID technology is on a general level, they are unable to comprehend how RFID can transform their supply chain to be more efficient, and hence, earn them return on investment (ROI)."
The analysts said that clever planning was required for businesses, which risk failing to reap the full potential benefits of RFID, if unprepared.
Frost & Sullivan, a global growth consulting company, provides businesses with analyses of markets, technologies, econometrics, and demographics.
The market for RFID along the food supply chain will be worth €4.3bn ($5.8bn) in 2017, according to a forecast published by analysts, IDTechEx, earlier this month.
