RFID Offers Value and Low Price with Chinese Brands

Mar 16, 2021Ed. Note: A version of this article originally appeared at  IoP Journal.

Prime Interway has announced a partnership with  iTAG that promises to encourage the use of radio frequency identification by Brazilian companies. The COVID-19 pandemic has accelerated e-commerce and the evolution of businesses toward digital and omnichannel operations—which involves sales through multiple channels, including digital, with the same physical stock—and this requires more robust technology investments, especially in RFID. Meanwhile, the pandemic has caused the U.S. dollar's value to jump from 3.20 to 5.50 Brazilian real, on average for the past few weeks, raising the cost of imported equipment that underlies RFID deployments.

In the midst of this phenomenon—and with the certainty that RFID adoption will grow immensely during the next five years, separating surviving and successful companies from those that will close their doors—Chinese products are increasingly becoming viable alternatives for technology investments. The costs of such goods are much lower than those of European, Japanese and American brands' products, and Chinese goods have improved a lot in quality, becoming more competitive.

Maurício Cervenk, Prime Interway's director of procurement for Asia, says that what gets in the way of many RFID projects is the cost of hardware. "We are bringing  Chainway readers and  Postek printers with very high quality and costs that enable investments by companies that need to adopt RFID in Brazil, but that previously were unable to buy the equipment." The reason for importing Chinese equipment, he says, is to enable the application of RFID on a large scale within the country.

The iTAG partnership, Cervenka explains, is considered strategic to enabling business and RFID expansion in markets that already require a high level of automation to reduce costs and increase business efficiency. "The partnership with iTAG has been going on for a long time," he says. "It is a strategic partner of ours. Prime is focused on hardware, and hardware is nothing without software and services. iTAG is very strong in software and services, mainly for the clothing market, with many interesting success stories."

According to Cervenka, "When Prime started to bring this new equipment to Brazil at a much more affordable cost, the partnership with iTAG was greatly strengthened." He says the agreement is valid for all markets in which iTAG operates, since it has recognized and awarded cases in areas such as manufacturing, automotive parts, healthcare and more. "iTAG has already signaled to us projects that were not being developed due to equipment cost problems—and which, with these new technologies, are now becoming viable, which for us will be very interesting."

Prime Interway has operations in Mexico and Colombia, Cervenka says, and customers have been looking for alternatives to the most well-known brands. "Logically, there is a market for all brands, including the leaders—which we also distribute—and which will not lose their space," he says. "What is happening in RFID is that this cake [of investments] is increasing. There are customers that are not in a position to invest a lot, and now we will be able to work better with this expanded portfolio of brands."

During the pandemic, Cervenka notes, many companies began to focus on online business through e-commerce. "At this time," he says, "it becomes very important to know what you have in stock, when you need your inventory in real time. Thus, you either reserve a part of the stock for e-commerce or you need to have a very high accuracy of your inventory. RFID makes this scenario possible."

Last year was a turbulent one for Prime Interway, Cervenka reports, but it was also a year in which many retailers turned to iTAG to be able to arm themselves for this new hybrid business model combining the physical and e-commerce worlds. "RFID makes this new model possible in a much more harmonious way," he states. Cervenka believes 2021 will be a year of growth in the technology sector, because companies have realized they need technologies to get through the pandemic crisis in order to survive and grow.

For Sergio Gambim, iTAG's CEO, the partnership with Prime Interway represents a new threshold, with hardware solutions that favor the investments of a growing number of Brazilian customers. "With our systems, companies are able to optimize business, save on operations, increase efficiency and gain speed in controlling inventories," he states. "With excellent quality equipment at a lower price, investments in iTAG RFID systems will be even more attractive."