Rfid in Indian Market

Case Study:

Introduction of RFID in the Indian Retail Market

RFID and the Indian Retail market

India represents an economic opportunity on a massive scale, both as a global base and as a domestic market. Retail growth in the coming years is expected to be stronger than GDP growth. This is driven by changing lifestyles and by strong income growth, which in turn will be supported by favorable demographic patterns and the extent to which organized retailers succeed in reaching lower down the income scale. In this light, Radio Frequency Identification (RFID) is fast becoming a hotbed of activity targeting the Indian market in retail, logistics and manufacturing.

A plan to introduce a whole new technology calls for an in-depth analysis of the dynamic economic, social and technological considerations. An attempt for the same has been made through SWOT analysis for introduction of RFID in the Indian retail segment. A phased approach has been suggested for the smooth implementation and adoption of RFID technology in India.

SWOT Analysis:

Strengths:

* Fewer errors

* Improved track and trace capability

* Greater efficiency

* A better customer interface

* Faster information dissemination to the customer

* Freeing up of personnel from tracking and ensuring item availability, giving them time to interact with customers. This often takes up to 70 percent of their time.

* Using Point-of-Sale (PoS) data, retailers will be able to plan replenishments better and help manufacturers improve demand planning

Weakness:

* Adoption will be slow in India as the retail sector is not organized and RFID requires an organized retail sector to be successful

* Privacy issues - It can constitute a breach of privacy as anyone having a tag reader, authorized or not, can track an object or a person wearing a RFID tag

* The high price of RFID tags and readers is a stumbling block.

* Some RFID readers today cannot read through metal and liquids.

* The industry needs to freeze on standards which customers can adopt.

* Infrastructure that is available is not capable of reading tags in transit.

* Training, education, exposure and research is required within an organization and business process needs to be changed

Opportunities:

* Boom in Indian economy (8% growth) and market liberalization.

* India has close to 13 million retail outlets -- the highest in the world; the retail industry is close to Rs 9 lakh crore, growing at 20 per cent

* Organized retail sector is expected to rise by 20 to 25% on YOY basis

* Liberalization of foreign direct investment in retailing is under active consideration. The government has allowed 51% FDI in "single brand" retail.

* Availability of quality real estate and mall management practices. (For instance, the recent SC ruling which opened up one of the largest real estate lands in Mumbai for a slew of retail activities)

* Consumer preference for shopping in new environs

* Indian companies