Asian RFID Outlook Predicts Opportunity in Halal Sector

Asian RFID Outlook Predicts Pockets of Opportunity

vendors who serve the Asian market were advised to tightly narrow their
focus to survive the economic downturn during an open webinar given by
international industry research and consulting firm Frost & Sullivan
last week. The presentation by research analyst Richard Sebastian
provided a glimpse into the current state and future direction of RFID
in Asia, including a few highly specific vertical market opportunities
and a prediction that a new favorite frequency will emerge.

The presentation, What are the Opportunities within the Asia Pacific RFID Industry?,
provided five recommendations for vendors to follow for 2009, which
Sebastian called “a very challenging year for companies in the RFID
industry to navigate,” because formerly booming Asian economies are
being hurt by weak export markets and decreasing domestic spending.
Manufacturing, shipment tagging and logistics applications that have
typically sustained the Asian market won’t match recent growth levels,
so Sebastian advised looking elsewhere for opportunities. He provided
five specific recommendations:

  1. Focus on applications that are simple, unique and innovative.
    In other words, not on applications that rely on implementations by
    multiple supply chain partners. Sebastian cited a DVD-tracking program
    in Malaysia as an example of a non-traditional application with strong
    growth potential. Between 15 and 20 million CDs have received passive
    UHF tags that denote the content has been certified as acceptable by
    government censorship authorities.


  2. Concentrate on high-demand markets. Current conditions mean
    even large RFID vendors cannot afford to invest time and capital to try
    to develop new or low-growth markets, according to Sebastian. Instead,
    he recommends focusing on areas where demand is proven and ROI periods
    are relatively short, such as document tracking and asset management.


  3. Consolidate resources and focus on key verticals. “RFID
    companies tend to get involved in too many areas at the same time,”
    Sebastian said. “Doing that means not being able to focus on real
    opportunities current in the market.” For example, Sebastian said Frost
    & Sullivan has identified many strong RFID opportunities in the
    Halal food industry, which requires documentation that foods were
    prepared and transported in accordance with Islamic law. Without tight
    focus, vendors could miss this opportunity. There are several other
    specific opportunities throughout the food supply chain, according to


  4. Explore new areas. “In these economic times, RFID
    stakeholders should seriously consider entering new markets and making
    them their own ‘blue oceans,'” Sebastian said. This appears to be a
    contradiction to the first three recommendations, which are variations
    on the same theme of narrowing focus. However, Sebastian feels there
    are markets that are under-penetrated by RFID vendors and offer good
    growth prospects. “The oil & gas industry holds great potential for
    RFID as a platform to support many applications,” — including
    environmental health & safety, asset tracking, personnel management
    and more, said Sebastian. “There are opportunities for RFID vendors to
    become thought leaders in a particular field.”

    RFID Update’s own research corroborates Frost & Sullivan’s
    assertion that there are opportunities in Asia for vendors to become
    thought leaders. Few firms hold high brand recognition ratings in Asia,
    and no Asian-headquartered firms are perceived to be brand leaders in
    the region, according to the 2009 RFID Brand Report.


  5. Prepare for needs. Frost & Sullivan predicts new product
    segments and frequency bands will make strong gains in Asia in the next
    few years, which could leave vendors with product portfolios that don’t
    suit market preferences. Sebastian notes that UHF revenues trail those
    of HF and LF frequency products in Asia, but adoption is increasing.
    “By 2014 [UHF] is expected to supercede the market share of HF and will
    hold a market share of over 46 percent,” he said. Strong RTLS sales
    growth is also expected.