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Wednesday, September 29, 2004

A perspective about RFID adoption in China and India

Two emerging giants - China & India are moving at differet pace in adopting RFID technology. China is on top of the RFID revolution. The Chinese have been at the helm of the electronic and semiconductor revolution. They may also be at the top of the radio frequency identification (RFID) revolution, thanks to the 2008 Summer Olympics and Wal-Mart.The first is understandable. The Chinese government has plans of showcasing the Chinese achievements to the world through the Olympics in 2008. Hence no cost or effort is being spared to harness the very best in technology to the Olympian event. Yet having Wal-Mart driving technology in China is another matter. The mega-retailer has directed its suppliers to use RFID tags on cartons and pallets, in which the products are packed, supplied to them. Wal-Mart's RFID implementation (currently in the United States) is going to be in stages, but other retailers such as Tesco and Metro AG have given similar directions to their suppliers.The catch here is that China has become the factory to the world. Its manufacturers supply directly to Wal-Mart and other such retailers. They also supply to the suppliers of Wal-Mart and others, which buttons up roughly 50% of all products being sold by the mega-retailers worldwide. Naturally, given the depth of China's involvement in global manufacture, the retailer's directions to its suppliers in the US on RFID tags will have a major impact on China in course of time. "The Chinese are not unfamiliar with RFID technology. However, the true impact of Wal-Mart's direction to its suppliers would be felt in 12 months' time in China,say analysts.Chinese suppliers would end up using about 5 trillion tags annually to supply to Wal-Mart alone during the next two years,according to industry estimates. The chinese government and business are all set to embrace RFID in a big way.

In contrast RFID is slow to take off(Reg.Required) in India. Key Concerns -RFID adoption is hampered by a lack of worldwide consensus about the frequency standards used for various applications. The US and North America operate on the 915 MHz frequency (UHF); Europe operates on UHF as well as a different frequency range; Japan on the microwave (Gigahertz) range, while Asia works with still another range. "In India, one has to get a special license from the Wireless Protocol Commission (WPC) to use the 915 MHz range and therefore these readers cannot be imported easily into India. Regulations such as these need to be standardized to enable popular adoption," says G.B.Prabhat,Director, Consulting & Enterprise Solutions of Satyam. Moreover, there has not been any explicit allocation of spectrum in the context of UHF RFID in India.He adds,"From the Indian industry point of view, the Wal-Mart mandate will not have a significant impact. However the spin-off effect of the mandate has led to this technology being in the news often and hence companies have started taking interest in this space."Prabhat opined that, knowing the conservative IT spending trends in the industry, Indian companies would go in for RFID only if they are convinced that they will get an RoI that they are comfortable with. "We expect RFID adoption in India to take place in a phased manner rather than after a dramatic fashion," he added.In the final reckoning, then, Indian industry hasn't been all too enthusiastic in taking to RFID, favoring instead a wait and watch approach though in terms of technology development, pioneering spirit hasn't been wanting. I believe that the gap between china and india is widening - every opportunity to be at par or ahead of china in terms of technology advancement and economic progress needs to be seized by India, the runner in the race, as of now ,to count as a competitor to china.

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