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Economic Slowdown - What are the
Opportunities within the Asia Pacific RFID Industry?
Richard Sebastian, Research Analyst
Automatic Identification – RFID
12th March 2009
2
Poll Question 1
Which of the following sectors do you anticipate to show the
strongest growth for RFID in Asia Pacific during this economic
crisis?
• Aviation
• Automotive
• Healthcare
• Industrial
• Retail
• Transportation and Logistics
3
Focus Points
Economic Slowdown – Internationalization of Crisis
RFID Posture – Pre and Present Levels
Five Areas of Opportunities
Conclusion
Q&A
4
Economic Slowdown – Internationalization of Crisis
Withdrawal of FII Inflows: Currency Depreciation
Lower Exports From Asia Due to Lower American and European Demand
Unwinding of Yen Carry Trade and FII Withdrawals
European Banks Withdraw Investments in Eastern
Europe
European Banks Lose Money on Sub Prime
Mortgages
Oil Prices Drop on Slower growth in Europe and USA
5
RFID Posture – Pre and Present Levels
• Gaining steady momentum
• Strong optimism
• Hype phase ends
• Commercialization becoming a reality
• Strong growth in majority of areas
• Pilots and proof-of-concepts moving to full scale implementation
• Tighter cash flow leads to projects canceled or postponed to a later date
• Slower growth expected
• Witnessing drop in sales revenue among majority of stakeholders
Pre 2009 2009 ~ 2010
6
What’s in Store Now?
"Although the global economy may be slowing, the
world's largest retailer is rapidly adopting RFID/EPC
technology and seeing tremendous benefits. Their
recent announcement of a new point of sale system
that uses RFID technology will truly change the global
retail experience for generations to come." (Louis
Sirico; Founder & CTO - Industry Wizards, 2009)
• Is it all gloom and doom?
• Possibilities boundless with RFID
• Strategize to capitalize on technology’s capabilities
• Could consider 5 pronged approach to grow
7
Five Areas of Opportunities
1st Opportunity
Think Simple, Unique and Innovative
DVD Tracking Billboard Tracking
Applications which create VALUE
Does not necessarily need to be of gigantic proportion
Simple; NOT complicated
Unique; NEW or service NICHE sector
Innovative; DIVERSE ways of incorporating RFID
8
Five Areas of Opportunities
2nd Opportunity
Concentrate on Market Demand
Document Tracking Asset Tracking
Quick ROI easier to justify
Focus on applications which show VERY high growth
Among the most sought after applications by end users
9
Five Areas of Opportunities
3rd Opportunity
Consolidate Resources and Focus
on Key Verticals
Animal Industry Healthcare Industry
Identify and embark on several rather than all verticals • Show stronger promise
• In-line with own strengths
Greater potential with industry specific solutions rather than generalist• Ability to build capabilities for long term
Focusing on too many areas may not show proportionate returns
10
Five Areas of Opportunities
4th Opportunity
Explore New Areas
Oil & Gas Industry Halal Industry
Limited or no penetration although immense potential
Consider new markets and create own ‘blue oceans’
Serve as a catalyst to become a thought leader
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Five Areas of Opportunities
5th Opportunity
Prepare for Future Needs
UHF
UHF Technology RTLS Technology
Planning to tackle immediate future important but preparation for long term equally
pivotal
Expanding or switching portfolio of products and services require time
Ensure ready for RFID boom when market begins to show signs of recovery
Strong need to understand various trends for future planning
12
5 Areas of Opportunity in the RFID Ecosystem
Step by Step Approach towards Seizing Opportunities
Think Simple, Unique and Innovative
Concentrate on Market
Demand
Consolidate Resources and Focus on Key
Verticals
Explore New Areas
Prepare for Future Needs
Source: Frost & Sullivan, 2009
13
Conclusion
Will identifying the potential areas of opportunities
alone be sufficient to ride through this economic
downturn?
Were the end-user segment fully convinced on
RFID’s potential and capabilities even during the
pre-economic crisis?
Some thoughts to ponder on…
Is the business case and ROI analysis done solid
enough?
Has the potential end user shared sufficient data to
compile a well thought of ROI analysis?
Points to seriously consider though often overlooked…
… ultimately demonstrating a solid ROI is key during any
economic climate…
14
Poll Question 2
Will R&D budgets for companies in the RFID ecosystem witness
budget cuts during this economic slowdown period?
• No
• Yes –25% and below
• Yes – 26 to 50 %
• Yes - 51 to 70%
• Yes – 71 % or more
15
Next Steps
Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities (www.frost.com/news)
Register for the next Chairman’s Series on Growth:
10 Core Tools to Drive Growth (March 17, 11am SGT)
(http://www.frost.com/growthapac)
Join us at our 4th Annual Customer Contact Asia Pacific Executive MindXchange May 6-7 2009, Kuala Lumpur (www.frost-ccap.com)
Join us at our premier flagship event Growth, Innovation and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, October, Kuala Lumpur (www.frost-gil.com)
Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company ([email protected])
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Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by taking our survey.
What would you like to see from Frost & Sullivan?
17
For Additional Information
Lennon Tan
Strategic Account Manager
Industrial Practice – Asia Pacific
(65) 6890 0280
Donna Jeremiah
Corporate Communications
Industrial Technologies Practice
(603) 6204-5832
Donna Jeremiah
Senior Manager
Corporate Communications
Industrial Technologies Practice
(603) 6204-5832
[email protected] Richard Sebastian
Research Analyst
Automatic Identification - RFID
(603) 6204-5834
