Driven by the government’s focus on the futuristic Internet of Things – embedding connectivity and intelligence in everyday objects – and a surge in private sector growth, China’s RFID card market will nearly double in value and more than double in units in 2017, according to Lux Research.

The RFID card/tag market volume will grow to 2.11 billion units, from 894 million in 2012, reflecting a compound annual growth rate (CAGR) of 19%. In revenue terms, the market will grow to $807 million in 2017, from $454 million in 2012, at a CAGR of 12%.

“So far, government applications account for 22% of the volume and 34% of the revenue, but that is about to change quickly,” said Richard Jun Li, Lux Research Director and the lead author of the report titled, “Identifying Growth and Threat in China’s Emerging RFID Ecosystem.”

“With the rise of market-driven applications, there are opportunities for multinationals to leverage China’s RFID growth – speed and identification of the best local partnerships will be critical,” he added.

Lux Research analysts studied the Chinese RFID market and government policy to evaluate growth prospects for the industry. Among their findings:

• Consumer market is the strongest. Driven mainly by the adoption of RFID tags for anti-counterfeiting, consumer applications will grow the fastest in volume terms – at a CAGR of 38% until 2017. Industrial applications will grow at a 25% rate, while electronic toll collection will be a fast-growing subsector.
• Local OEM players emerging. The rise of Chinese original equipment manufacturer (OEM) suppliers for RFID cards/tags is creating a new industry dynamic. Currently, the top 15 suppliers – led by China Card Group and Tatwah Smartech – account for 57% of the Chinese market and are poised for further gains.
• Focus is on fast-growing UHF market. Chinese companies do not have as strong a position in superior ultra-high frequency (UHF) chips – which will grow dramatically to become a $236 million market in 2017. However, the clock is ticking for multinational suppliers, as the Chinese government is putting significant resources into developing homemade UHF chips.

The report, titled “Identifying Growth and Threat in China’s Emerging RFID Ecosystem,” is part of the Lux Research China Innovation Intelligence service.

By SRI Consulting Business Intelligence/National Intelligence Council [Public domain or Public domain], via Wikimedia Commons