Significant Demand for RFID Applications From APAC Countries Will Boom Prospects for the Global RFID Market Until 2020

According to the latest research study released by Technavio, the global radio frequency identification (RFID) market is expected to record a CAGR of 11% until 2020.

Manufacturing industries are focusing on increasing their investments in integrating advanced technologies in order to improve efficiency. Manufacturing processes often involve operations in harsh environmental conditions (high temperature, the presence of chemicals or other fluids, and humidity) in which traditional barcodes are not suitable. In such conditions, RFID systems are utilized at different phases of manufacturing to increase efficiency and reliability. Many countries such as India, the UK, and the US are encouraging start-ups, which has increased competition among vendors and this trend will likely persist over the next four years.

Increasing adoption of electronic identity cards and RFID tags located in smart cards is the major driver for this segment. To increase the penetration of smart card technology in developing countries, governments of many countries have deployed smart card systems for driving licenses, metro cards, e-passports, public distribution systems, voter IDs, and other IDs. RFID, inscribed in smart cards, store customer details that can be easily retrieved at any point of time. Governments of countries such as China and the UK have mandated the use of smart cards for citizen identification purposes.

In addition, the use of RFID in banks provide an additional layer of security for bank and customer data, thereby reducing the chances of the information getting lost or stolen. An RFID embedded bank card can also be used for transactions without actually swiping the card or even without entering the PIN. Convenience offered by RFID systems is thus likely to drive its application in the financial services sector.

Vehicle movement tracking and cargo tracking in planes and ships are some key applications of RFID systems in logistics. RFID tags are also preferred in the railroad industry for tagging locomotives. VR Group and VR Transit, the largest logistics providers in Finland, have adopted RFID for rail freight wagons and passenger cars. In the railway budget of 2015-2016, the government of India proposed using RFID technology in their locomotives, wagons, and coaches for tracking. RFID systems also help track and retrieve stolen cars. These developments are key to the growth of this segment and will likely encourage many new entrants to expand in this market over the forecast period.