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The global and Russian markets of RFID tags and readers

January 2019

Analytical Report (full version)

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Analytical Report (full version)

The global and Russian markets of RFID tags and readers
The global and Russian markets of RFID tags and readers
January 2019

The global and Russian markets of RFID tags and readers

January 2019

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J’son & Partners Consulting presents the results of the study devoted to the Russian and world market of RFID tags and readers, as well as prospects for their development.

 

Key trends in the global RFID technology market

 

The global market of radio frequency identification (RFID) technologies has been demonstrating sustainable development in recent years. Currently, the world operates about 59.5 billion RFID devices. The largest aggregate number of devices (20.55 billion, or about 34.5%) is used in the retail sector. The next most important market segments are smart cards and smart tickets, these devices together account for about 32.8% of the global fleet of RFID devices. Over 1 billion RFID devices are also used in the segments of marking equipment, books, vehicles, logistics, animal husbandry, health care.

 

In the period from 2015 to 2017, the global RFID market grew in value terms by 12.6% - from 9.95 up to 11.2 billion dollars.

 

Sales of RFID equipment in real terms also demonstrated sustainable development. If in 2016, about 15.2 billion RFID tags were sold in the world, by the end of 2017, sales in real terms reached 18.2 billion units.

 

On the global market for RFID technologies, there are currently three key regions using specified products: Asia-Pacific region, North America and Europe.

 

Together, these macro-regions account for about 84% of the global consumption of related equipment and services.

 

 

 

The competitive environment in the global market of RFID-technologies is represented by more than 1000 companies:

 

▪          Market leaders are the companies that provide annual sales of relevant equipment and services in excess of 100 million dollars. Geographically they are presented in several macro-regions;

▪          Following the leaders are the companies with annual sales of 20-100 million dollars with limited geographical presence;

▪          Other players are companies with annual sales of up to 20 million dollars. As a rule, they operate in a geographically limited market.

 

In subsequent years, the global RFID market will continue to demonstrate sustainable development and may reach 16.2 billion dollars by 2021. Passive RFID tags will continue to be the most capacious segment of the market, the demand for these products by 2021 is estimated at 6.4 billion dollars.

 

The highest growth rates of demand in 2017-2021 will be noted in the segment of related services, software, and network equipment.

 

Key trends in the RFID technology market in Russia

 

The Russian market of RFID-technologies is at the stage of formation and occupies a small volume in global sales. The current volume of the Russian market of RFID solutions is estimated at approximately 250 million dollars. Active promotion of RFID technologies in Russia began in 2005-2006 when integrators began not only to offer solutions based on RFID but also to conduct an active marketing policy to promote them.

 

Analysis of the current situation in the RFID market shows that the most popular areas of implementation of these technologies are logistics, production and access control, pharmaceuticals and jewelry industry.

 

Here are the most important events that occurred in 2017 and show the significant potential of the RFID market in Russia:

 

1. In November 2017, it became known about the possibility of development of a Russian system for continuous tracking of turnover, which would allow controlling any commodity transactions of business together with retail sales and taxation. Following the meeting held on 10.11.2017, Prime Minister Dmitry Medvedev instructed five agencies (the Ministry of industry and trade, Ministry of Finance, Federal tax service, Federal customs service, Federal security service) to develop and submit "draft concepts for the creation of a system of marking goods with control (identification) signs in the Russian Federation". The deadline for the execution of the order is 10.02.2018. It is about the preparation of the legislative and conceptual framework for one of the largest projects of control over the commodity markets in the history of the country — a system of continuous marking of goods with identification marks until 2024 and "measures for the transition to the system of tracking the movement of all groups of goods in the territory of the Russian Federation". Similar projects already exist for medicines, furs and tobacco.

 

2. On May 2, 2017, the Eurasian Economic Commission issued the Order of the EAC Council No. 45, which approved the list of goods proposed by the Russian Federation, in respect of which it is advisable to introduce labeling:

▪          3004-medicinal products;

▪          00 3303 - perfumes and toilet waters;

▪          4011 - tires and tires, pneumatic, rubber, new;

▪          4203 10 000-natural leather clothes;

▪          6106-blouses, blouses, and blouses, knitted or crocheted, for women or girls;

▪          6201 – coats, capes, cloaks, anoraks (including ski-jackets), windcheaters, wind jackets and similar articles men's or boys';

▪          6202-coats, coats, capes, raincoats, jackets (including ski), windbreakers, windbreakers and similar articles for women or girls;

▪          6302-bed linen, table linen, toilet, and kitchen linen;

▪          6403 – footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather;

▪          9006-cameras (except movie cameras); flashlights and flash lamps.

 

3. The launch of serial production of equipment for medicine labeling by Rostec in Russia. As part of the development of digital healthcare, ROSTEC state Corporation announced on 16.10.2017 the launch of serial production of equipment for labeling medicines. The center for the development of advanced technologies has been appointed as the project operator. The volume of investments in the project, according to the industrial Director of the radio-electronic cluster of the state Corporation ROSTEC Sergey Kulikov, exceeded 20 million euros.

 

4. In March JSC "Angstrеm" received a positive conclusion from JSC "Goznak" on testing RFID-tags for fur. During the tests, the radiometers demonstrated high strength and resistance to external factors: temperature, mechanical, chemical, humidity. The estimated volume of supply of RFID labels for fur products on the domestic market could reach 2.5 million units a year.

 

5. At the end of September 2017, the operator of the pilot project on cigarette labeling was defined. The work starts in 2018. It can be the Center for Advanced Technologies Development, established in June 2017 with the participation of Rostec and USM Holdings. The experiment should be carried out within the framework of public-private partnership, so this Center was chosen. Its 50% are owned by Nexign (ex. “Peter-Service", a part of A. Usmanov's USM Holdings), 25% is owned by the Open Company "Elvis +" (A. Galitsky).

 

6. The equipment made by "PCT-Invent", the Russian manufacturer of radio frequency identification systems (RFID), is integrated into the labeling system for our products "Marking" from the Federal Tax Service. RFID reader Bookos 2.0 FE from "PCT-Invent" is designed to work with fur products marked with control identification marks and is fully compatible with the FTS Software. Bookos 2.0 FE meets all the requirements of the tax service to RFID-equipment for verification, individualization, and reading of PPEs.

 

Only a limited number of domestic companies producing RFID products operate in Russia. The key players in the Russian market include the following companies:

▪          Mikron/SITRONICS Smart Technologies;

▪          Angstrеm;

▪          RST-Invent;

▪          Concern Vega.

 

The key player in the Russian Federation in terms of implementation of RFID solutions is Mikron, which evaluatively controls at least 60-70% of local production.

 

On the Russian market of RFID technologies, there is also represented a fairly wide range of foreign equipment. According to Roskomnadzor 73 product items were certified on the Russian market in terms of the application of RFID technologies. According to the FCS of the Russian Federation, the total volume of imports of RFID technologies to the Russian market in 2015-2016 was 18.3-19.2 million dollars in cost expression, showing a downward trend in imports.

 

It should be noted that the volume of exports of RFID products from Russia increased in 2016 compared to 2015 - from 1.1 million to 1.9 million dollars. Key regions for export of RFID products produced in the Russian Federation, until recently, were the United States, where Russian companies sent about 85% of export products.

 

Currently, there are several main categories of players in the domestic market offering RFID equipment:

▪          distributors (not directly involved in the implementation of equipment);

▪          integrators (engaged in the construction of integrated solutions);

▪          manufacturers (partly engaged in the implementation of the developed equipment).

 

The public sector plays an increasingly active role in shaping the demand for RFID solutions in Russia. For 2012-3 months. In 2018, Russia conducted more than 300 public procurement for the introduction of RFID technologies in the amount of more than 900 million rubles. at the end of 2017, the total volume of public procurement in the field of RFID-technologies reached 423 million rubles. The largest purchases in this area in recent years were made by the following customers:

 

▪          FSUE FSPC "PRODUCTION ASSOCIATION "START" named after M. V. PROTSENKO";

▪          PKU "DIRECTORATE OF THE STATE CUSTOMER ON REALIZATION OF THE FEDERAL TARGET PROGRAM "MODERNIZATION OF TRANSPORT SYSTEM OF RUSSIA";

▪          JSC "GOZNAK";

▪          PJSC "SBERBANK OF RUSSIA";

▪          FGBI "RUSSIAN NATIONAL LIBRARY";

▪          DEPARTMENT OF HIGHER EDUCATION "NOVOSIBIRSK STATE TECHNICAL UNIVERSITY";

▪          FGKU MAIN INFORMATION AND COMPUTING CENTRE OF THE FEDERAL AGENCY FOR STATE RESERVES;

▪          FSAEI OF HIGHER PROFESSIONAL EDUCATION "NATIONAL RESEARCH UNIVERSITY "MIET".

 

Prospects of the RFID technology market in Russia

 

Prospects for the implementation of RFID solutions in the Russian Federation are largely linked to the need to use radio frequencies in special bands, which entails the need to obtain appropriate permits for the equipment used.

 

Currently, the following standardized frequency ranges are widely used:

▪          Low frequencies (LF, LF) - 125-134 KHz

▪          High frequencies (HF, HF) – 13.56 MHz

▪          Ultra-high frequencies (UHF, UHF) – 860-960 MHz

▪          Microwaves (SHF) - 2.4 GHz

 

Decree of the Federal Agency for technical regulation and metrology №56-St (26th April 2011) approved the national standard of the Russian Federation called GOST R ISO/IEC 15963-2011 "Information technologies. Radio frequency identification for object control. Unique identification of RFID tags" with the date of enactment 1st January 2012.

 

This standard establishes requirements for the structure of identifiers that are recorded in the memory of radio frequency labels while ensuring their unique identification.

 

The standard can serve as a basis for the development of regulations for specific applications in the field of radio frequency identification and is intended for developers and manufacturers of integrated circuits of radio frequency tags, as well as for all users of radio frequency identification technology.

 

Projected capacity of the Russian RFID market by 2020-2023 can reach 500 million dollars if existing barriers to the use of radio frequencies are removed.

 

In the medium term, the following potential "growth points" of the RFID market can be identified in the domestic market:

▪          Post Service. The company "RST-Invent" together with FSUE "Russian Post" launched a pilot project for mail labeling in cities such as Moscow, St. Petersburg, Nizhny Novgorod, Yekaterinburg, Rostov-on-don and Novosibirsk.

▪          Textile Industry. A pilot project for the identification of fur products was launched in 2015.

▪          MIC.

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This information note was prepared by the J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and available at the time of release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information by individual players. 

 

Copyright © 2018, J'son & Partners Consulting. The media can use the text, graphics, and data contained in this market review only using a link to the source of information - J'son & Partners Consulting or with an active link to the JSON.TV portal

 

™ J'son & Partners [registered trademark] 

 

Detailed results of the study are presented in the full version of the report:

 

The global and Russian markets of RFID tags and readers

 

Contents

  1. The global market of RFID tags and readers

1.1.  Volume of the global RFID market

1.1.  Geographic structure of the global RFID market

1.2.  Structure of demand in the world by types of RFID equipment

1.3.  Industry structure of the global RFID market

1.4.  Competitive environment trends in the global RFID market

1.5.  Cost analysis of solutions in the global RFID market

1.6.  Analysis of the main drivers and limitations of the global RFID market

1.7.  Key standards in the global RFID market

  1. Russian market of RFID tags and readers

2.1.  Main trends in the Russian market

2.2.  Nomenclature of the foreign equipment presented in the Russian market

2.3.  Key players in the Russian RFID market

2.4.  Analysis of foreign economic activity in the RFID equipment market in Russia

2.5.  Main projects implemented in Russia in the field of RFID technology

2.6.  Key technical features of RFID technology projects in Russia

 

List of annexes

Annex 1. Register of foreign RFID equipment allowed for import to the territory of the Russian Federation

Annex 2. Public procurement of RFID equipment in Russia in 2012-2018

 

List of pictures

Pic. 1. Volume of the global market of RFID technologies in 2015-2017, billion dollars

Pic. 2. The global market for RFID tags in 2016-2017, billion pieces

Pic. 3. Geographic structure of the global market for RFID products

Pic. 4. Volume of the global market of RFID equipment in 2016-2021, billion dollars

Pic. 5. Sectoral structure of the market for RFID products in the world

Pic. 6. Dynamics of changes in the cost of RFID equipment in the world (using the example of China)

Pic. 7. Cost structure of life cycle of RFID systems for 3-year period

Pic. 8. Volume of RFID equipment import in Russia in 2015-2016, million dollars

Pic. 9. Volume of RFID equipment export from Russia in 2015-2016, million dollars

Pic. 10. Volume of public procurement of RFID products in Russia in 2012-2018, million rubles

 

List of tables

Table. 1. Sales volume of RFID tags in 2017 in real terms by market segments                              

Table. 2. Sales of RFID products in China in 2010-2021, billion yuans

Table. 3. Cumulative sales of RFID tags in 2017 in real terms by market segments

Table. 4. Structure of competitive environment in the global RFID market

Table. 5. Value chain in the global RFID market (using the example of China market)

Table. 6. Specialization of the main players of the RFID technology market in China

Table. 7. Analysis of current prices for RFID equipment in the global market

Table. 8. Costs for implementation of RFID in the global market

Table. 9. Main barriers to the introduction of RFID technologies in the global market

Table. 10. Key international standards in the RFID market

Table. 11. Nomenclature of RFID equipment supplied by Micron

Table. 12. Nomenclature of RFID equipment supplied by Angstrom

Table. 13. Revenue of key Russian RFID equipment manufacturers, million rubles

Table. 14. Revenue of key Russian distributors of the RFID market, million rubles

Table. 15. Structure of imports by type of RFID equipment

Table. 16. Structure of RFID equipment imports by country, thousand dollars

Table. 17. Structure of imports by RFID equipment manufacturers, thousand dollars

Table. 18. Structure of RFID equipment imports by importers, thousand dollars

Table. 19. Structure of RFID exports by manufacturers, thousand dollars

Table. 20. Structure of RFID exports by country, thousand dollars

Table. 21. Main implemented projects on RFID technology implementation in Russia

Table. 22. Key buyers of RFID products in Russia according to the results of public procurement procedures in 2012-2018

Table. 23. Technical characteristics of RFID systems with different operating frequencies in Russia

Table. 24. Recommendations for use of RFID systems in Russia