CEO KC Lau explained that the adoption of RFID tracking technology is on the rise, and as an industry leader, SML Group is well positioned to capitalize on this growth – especially due to its increased focus on R&D.
Even if you've never heard of radio frequency identification (RFID) tracking technology before, chances are you've come across it in your day-to-day activities and may not even be aware of it.
Because RFID tags are increasingly being used in fashion, retail, and pharmaceutical**, this is changing not only the way companies do business, but also the way they interact with consumers.
Some common uses include tracking shipments or visiting buildings, and RFID technology can help improve operational efficiency, cut costs, and improve sales performance. It can improve inventory accuracy to 93 to 99 percent, helping retailers fulfill orders and process sales more efficiently.
But according to KC Lau, CEO of SML Group, the potential of RFID technology as a method of collecting data and tracking movement extends far beyond current applications and is likely to be applied across all industries and sectors.
Not long ago, SML Group recognized the far-reaching possibilities of RFID technology, and the company quickly seized the opportunity at hand. In fact, since Asia People's last conversation with Liu University in 2017, the group has enjoyed a double-digit compound annual growth rate (CAGR) every year – the growth is largely driven by the increasing adoption of RFID technology.
Lau said that while a large part of this period was hit by the uncertainty of the pandemic, the turmoil actually sent demand for RFID technology skyrocketing. In 2020, in the first year of the pandemic, the company sold a staggering 2.3 billion RFID tags.
"People's shopping behaviour has changed, with more and more businesses, not only demanding more from inventory accuracy and how effectively they handle the situation, but also paying more attention to buying and picking up at the store," he explained. ”
In return, the store's shopping behavior also creates some extra work when dealing with all those returned products. For example, our RFID technology helps them quickly see which items can be resold on the floor. ”
Despite this uptick, only about one in five retailers and brand owners have deployed RFID to date, indicating significant growth potential, Lau said.
According to LAU, SML Group is now at the top of the US-approved mosaic in terms of R&D efforts on its label technology itself, and it is considered one of the largest players in the RFID market.
We are in a strong position in the market," he said. "There's a lot of R&D work to do, so we've invested a lot of money in this area. ”
Its products include SML RFID TotalCare – an "end-to-end solution" for all item-level RFID needs in the retail sector. This is designed to help companies with "item-level" inventory management to provide financial impact and return on investment.
Its Inspire RFID technology ranges from fully integrated tags to tags powered by SML's Clarity Software, an RFID inventory and operations software platform.
In addition to this, SML's customers utilize RFID technology in different ways. These include customization and creating more value in operations, sales lift, and efficiency.
In 2021, the global RFID market was valued at $11.8 billion and is expected to reach $31.5 billion by 2031, with a CAGR of 102%。
The results speak for themselves. In 2022, 3 billion RFID tags were shipped, and SML deployed its proprietary software, Clarity, to more than 5,000 stores.
After starting its life as a label and accessories merchant in 1985, SML Group naturally attracted the apparel and footwear market when it entered the field of RFID technology. Over the past decade, the company has managed to make a name for itself in these areas.
SML Group is the second largest RFID player in the footwear and apparel industry, but it is the number one solution provider in these markets, relying on the number of RFID-enabled stores or distribution centers.
Other sectors have also seen significant growth, including pharmaceuticals, cosmetics and packaging.
LAU also sees great potential in the food industry.
"The big wave is coming because we're seeing a lot of QSR initiatives coming and it's going to be more about tracking readiness or reasoning as well," he said'First in, first out'concept. "We're excited to create a really good pipeline and excited to see how it will grow over the next two to three years. ”
Global expansion is also a priority, with SML announcing the launch of its Middle East operations earlier in 2023. With its new base in Dubai, the company will meet growing demand across the region while supporting its further expansion globally. According to Seed Group, the booming retail market in the United Arab Emirates is expected to grow to $70.5 billion by the end of 2027.
In today's ever-changing world, this expanded reach is more important than ever. The paralysis caused by the pandemic in countries remains a problem, hindering the delivery of goods and affecting the ** chain.
"We are still seeing many countries suddenly knocked out, for three months, they have not been able to work," Lau said. "But because of our global concerns, we were able to manage the situation and reroute to other locations. ”
SML also ensures that its employees have access to vaccines and continues to implement improved safety measures, including improved sanitation conditions at the plant and enhanced care for employees and their families**. All of these elements come together to help create a welcoming and safe atmosphere for all employees, he explained.
Because of this, the overall feeling is that the company has emerged from the challenges of the past few years, despite occasional scheduling delays. He attributes the team's impressive performance to the prioritization of communication.
Day in and day out, week after week, we work with the team to understand where the problem is or what they need," he expanded.
He clarified that this is not only from a financial point of view, but also from a welfare point of view.
"At the time, I thought 60 to 70 percent of the world's people were living in real fear," he said. ”
But SML helps ease that emotion by engaging in activities to keep employees engaged and feel like they're part of something, using technology to keep the team connected, even when face-to-face meetings are difficult.
Launched in 2019, SML's three retail creative spaces, thousands of tagged items were tested in a wide range of scenarios that could arise in distribution centers and in-stores.
The facilities also incorporate technology from SML's partner ecosystem, as well as a packaging and décor ideation studio designed to foster more hands-on collaboration on design, packaging and décor options.
"For the past three years, we have continued to hold annual awards events for all our employees around the world," Lau said. While it was impossible for them all to be present in person, the company hosted a virtual awards dinner, which he said was a great success.
"Sometimes we have to change the way we do things because the world is changing, so we have to try to adapt," he said. "But I'm excited to be a part of it and lead the team to make a difference. ”
The circular economy is a key pillar of this approach, as more and more brands take their sustainability responsibilities more seriously.
He believes that support for this product lifecycle is a very important aspect of SML's business.
It's clear that their commitment to sustainability is unwavering. LAU explained that SML has developed sophisticated reporting practices to demonstrate the sincerity of its commitments.
He explained: "We have set up an ESG team in the company, and every year we receive an annual report from the ESG group, where we set targets for the next seven years. "I strongly support this because I believe it is one of the core values that keeps the company moving forward and attracting more talent to work at the company. ”
This isn't the only transition to sweeping SML. Over the past few years, the company has also repositioned itself to focus on R&D and retail applications of RFID technology.
"We set up a Technology Innovation Development Centre in Hong Kong in 2022, with a primary focus on the manufacturing of RFID inlays, but also on how to further expand R&D, because we all know that more and more products will be tagged with this technology," Lau said. ”
The center opened in May 2022 to help SML customers transition to a digital-first future while enabling the company to grow its business operations globally.
The development center also has a sizable laboratory for testing the performance of inlays in different situations. For example, their reactions to food and different environments," he continued. "We are very happy that this center has been established.
We are able to thoroughly test the latest chip technology before it hits the market, ensuring that the RFID** device performs reliably and will bring value to the business. That's how we keep improving. ”
In line with this vision, SML has also established three major retail creative spaces across its global network: Dallas (US), Kobe (UK) and Shanghai (China).
"There, we simulated retail stores, convenience stores, logistics centers, etc," he explains. "We're really excited about these and I think this creates a really good platform to showcase the products of some of our talented players and work with them to work with them on the exact needs of our customers right now. ”
Lau's own role in this ever-changing picture cannot be underestimated, and his responsibility is highlighted during the turmoil of the pandemic.
"I think what I've learned as a leader over the last six years is that as a leader, you also have to step up and take responsibility for all the decisions that you have to make, try to work with your team, be open, listen to them, be transparent," he said. ”
When I look at my leadership, the flip side is to always keep the team focused, because when we juggle too many things at the same time, it can make a big difference. ”
For him, staying focused means finding the right balance between his professional and personal life, and he does this by prioritizing relaxation and making sure he has time to get away from his desk and many responsibilities.
When I'm not working, I walk a lot," he said. "Usually on weekends, I walk more than five or six hours a day, and I do a lot of exercise trying to relax my mind and not think about business.
Sometimes you have to find some time to do something you enjoy to relieve some of the accumulated stress, not just on the business side. Even during the pandemic, I've stuck to these habits. So I'm glad that I'm still very healthy and at the same time have built a very trustworthy company in the market. ”
Quality control is at the heart of SML's Technology Innovation and Development Center (TIDC), which is working to achieve performance standardization and reliability, in line with its ambition to raise the bar across the RFID industry.
The state-of-the-art center uses the latest technology from Germany and Finland to produce RFID inlays more efficiently, ultimately increasing SML's annual production level.
Its multi-point performance check system will also ensure that the performance of the inlay meets enhanced quality standards.
TIDC is involved in accelerating the adoption of automation and industrialisation in Hong Kong. We have implemented a** [automated guided vehicles] to transport goods, from raw materials to finished products, to maximize manufacturing efficiency," Liu said.
We are determined that the Centre will be an incubator for aspiring RFID talent who will represent Hong Kong in the global growing workforce in the digital ID industry. ”
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