RFID Preparing to Move Out of $6B Chinese National ID Program's Shadow

(Business News & Technology News, 6 Mar 2008)

China boasts not just the world's largest RFID-enabled government ID card initiative, but a wide range of other RFID application projects in transportation ticketing, animal tagging, anti-counterfeiting, real-time location systems (RTLS), asset tracking, e-ticketing, and contactless payments. According to a new study from ABI Research, their total market revenue in 2008 will reach nearly $1.4 billion.

Citizen identification is China's largest RFID application: according to the government, 900 million to 1 billion ISO 14443-based ID cards will have been issued from 2005 through the end of 2008 at an estimated cost of $6 billion.

"Unfortunately all good things must end," says research director Michael Liard, pointing to the ID card project's approaching conclusion. "That one program generated significant revenue for local vendors and stood out in terms of its size and scope. However, China must prepare for RFID's next wave and the applications that will keep China in the RFID spotlight."

As the RFID market in China expands, foreign players such as Alien Technology, Avery Dennison, Confidex, Impinj, Infineon, Inside Contactless, iPico, Invengo, Motorola, NXP Semiconductors, Texas Instruments, UPM Raflatac, and many others play important developmental roles.

Animal tagging is poised to be another leading RFID application. "The Chinese government is anxious to use RFID tagging to enhance the safety and security management of food production," says Liard. "ABI Research expects that by 2012 this market will account for $94 million in revenue."

ABI Research also sees a large RFID potential for public transport. More than 17 million RFID-based public transportation cards will be issued in 2008. And, the first 25 million of 125 million RFID-enabled single train tickets ordered over a five year period were issued last year in the Guangshen Railway: a strong start for a market which sees 3 billion passenger journeys a year.

Anti-counterfeit e-ticketing applications are growing as well. The upcoming 2008 Olympic Games and the 2010 World EXPO in Shanghai are creating demand for e-tickets and other RFID-enabled services. Liard adds, "We could see more than 12 million e-tickets for the Beijing Games. The World EXPO could create demand for nearly 70 million e-tickets."

Click here for the study "RFID in China" by ABI Research