China drives demand for RFID tags in Asia

Text: Vesa Puoskari
Photos: Jouko Järvinen, Sami Helenius, UPM

The RFID tag market is expected to grow worldwide by about 25−30% by 2013.

According to Samuli Strömberg, Vice President, Marketing, UPM Raflatac, RFID, China is driving demand for RFID tags in Asia.

The country's economy has continued to grow despite the global downturn, and the Chinese readily utilise the latest product innovations. The State in particular has an important role in promoting the introduction of new technologies.

Eva Luo, General Manager of UPM Raflatac's factory in Guangzhou, confirms the trend, which is also reflected in the factory's operations.

"The production volume has increased since last year, and by year-end we will be employing new people. Expectations for the future are high here," Luo says cheerfully.

Currently, RFID tags in China are mainly used in public transport
and libraries.

Public transport becomes faster

It has been easy to introduce modern technology in public transport, as the infrastructure investments are new.

"In access control, tags are faster to use than conventional methods, which makes public transport run more smoothly. The benefit is considerable during rush hours in large cities, as each second gained per passenger is valuable," says Strömberg.

The service and maintenance of access control devices is also easier compared with that of mechanical ones.

New applications

"A new application of RFID tags in Asia is product origin labelling, as the tags are a cost-effective method of preventing brand forgery," says Strömberg.

The trend-tracking textile and clothing industry has introduced RFID technology too. It uses the technology to increase logistical efficiency, track consumer preferences and develop their collections based on the information obtained.

In the future, tags will include new features which can be integrated into the basic technology. "Features such as these are, for example, sensor functions which ensure the functioning of the cold chain in food shipments," Strömberg says.

Price no obstacle

According to Edward Lu, Sales and Marketing Director, APAC, UPM Raflatac, the United States and Europe are still the drivers of the tag market, followed by Asia. The value of the market is estimated to increase to a total of about USD 11 billion by the end of 2013.

In Lu's view, the price of tags is not a barrier to adopting the technology. It is more the return on investment (ROI) that a RFID application can bring to an organisation that is driving the adoption. The costs of disposable tags especially have fallen significantly, which has enabled a large number of new applications. Tags can also be recycled, which means a longer lifecycle.

The benefits of adopting RFID technology are considerable. For example, the Indian manufacturer of steel profiles, Viraj Profiles, has accelerated their logistics process through RFID technology. The company, which exports its products to more than 80 countries, increased its deliveries by more than 20%. The investment paid for itself in six months.