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Chinese RFID Market Doubling

Beijing-based research firm Analysys International recently released an analysis of the Chinese market for RFID. This article highlights key findings from the report.
Tags: Privacy
Aug 31, 2005This article was originally published by RFID Update.

August 31, 2005—Beijing-based research firm Analysys International recently released an analysis of the Chinese market for RFID. Following are key findings from the report, as reported by the NewsFactor Network:
  • The market doubled from Q2 2004 to Q2 of this year, with aggregate sales totaling US $27.9 million.

  • Government-sponsored programs are the leading contributor to market demand.

  • The primary example of this is the Chinese national identification card initiative, which some predict will see the introduction of more than a billion RFID smart cards. At 38%, the initiative accounts for the largest slice of the overall RFID market, according to Analysys.

  • RFID adoption is enjoying momentum where the scale of the application is large. Aside from the national ID cards, public transportation is another example, which accounts for 14% and the second largest share of the market.

  • The third largest contributor to the RFID market are school campus applications, with 11%.

  • Property and residential applications are fourth with 8%.

  • Highway and e-ticketing applications tied for fifth with 7% a piece.

  • High costs, lack of a unified standard, and immature supply chains are cited as the three major hurdles confronting wider mainland adoption of RFID. (This is intuitive given the ground realities of North American deployments, where cost is also cited as a leading impediment. Note that margins for many Chinese manufacturers are just as slim, if not slimmer, than those of their Western counterparts, and, worse, deployments are comparatively much more expensive for a Chinese business having to pay North American prices for RFID products and equipment.)

  • Analysys recommends that Chinese firms undertake closed-loop RFID projects as a key strategic initiative. Gaining experience and competency with the technology now, before the market has matured, will position such early adopters well for the moment when adoption accelerates. Furthermore, it will encourage firms to begin allocating resources in their budgets for the purchase of RFID.

  • Strong growth is expected to continue, as Q3 demand benefits from continued issuance of ID cards and students returning to school.

Read the article at NewsFactor Network
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