Analyst reports track and trace market outlook despite current apparel rollout slowdown

Analyst reports track and trace market outlook despite current apparel rollout slowdown

Despite the 2008-2009 economic setbacks, the radio frequency identification (RFID) market rebounded nicely in 2010, growing slightly more than 14% to reach roughly $5.3 billion, according to industry analysts.

When automobile immobilisation hardware is extracted from the total, the market grew close to 18%, capturing nearly $4.4bn. ABI Research’s ongoing research and data collection efforts have revealed a projected total market size of nearly $6bn in 2011, reflecting slightly more than 11% growth. The 2011 forecast without automobile immobilisation is $5bn, growing in excess of 14% over 2010.

ABI has predicted variation in demand and the pace of adoption between applications, verticals, regions and technologies, with the retail apparel sector in particular displaying something of a slowdown in growth this year. However, it said, the bottom line is that across the market as a whole will continue to see strong potential for future growth.

Item-level tracking fosters adoption

ABI Research director, Michael Liard, noted: “The fastest-growing application between now and 2016 will be item-level tracking in supply chain management, which ABI Research estimates will exceed a 37% growth rate.”

Such growth is being driven by high-volume demand for passive UHF systems to support retail apparel tagging in US, Europe and other select country markets; pharmaceutical tagging in Korea due to government compliance; wine, tobacco and other anti-counterfeiting tagging efforts, notably in China; and other items over the long term, including cosmetics, consumer electronics and more.

“The fastest-growing verticals over our five-year forecast period (in descending order) will be retail CPG [consumer packaged goods], retail instore, healthcare and life sciences, diverse non-CPG manufacturing, and commercial services,” Liard aded.

More specifically, the analyst breaks primary RFID applications down into “traditional” and “modernising” types. In the former group are access control, animal ID, automotive immobilisation and e-ID documents. The modernising category includes asset management, baggage handling, cargo tracking and security, point-of-sale contactless payment, real-time location, supply chain management, and ticketing. The firm said the 2011-2016 compound annual growth rate (CAGR) for aggregated modernising applications is expected to be double that of the traditional applications cluster.