The report “Track and Trace Solutions Market by Product (Hardware, Software, Standalone Platforms), Application (Serialization, Aggregation, Reporting), Technology (2D Barcode, RFID) End User (Pharma, Food, Medical Devices, Cosmetics) – Global Forecast to 2027″, is projected to reach USD 8.6 billion by 2027 from USD 4.8 billion in 2022, at a CAGR of 11.6% during the forecast period.
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The stringent regulations and standards for the implementation of serialization and the increasing focus of manufacturers on brand protection are the major drivers of growth for this market. On the other hand, the high costs and long implementation timeframe associated with serialization and aggregation, as well as the huge setup costs, are expected to limit market growth to a certain extent.
Key Market Players
The global track and trace solutions market is highly fragmented, with prominent players, such as OPTEL Group (Canada), Uhlmann Group (Germany), SEA Vision S.r.l. (Italy), Syntegon (Germany), and Antares Vision S.p.A. (Italy), accounting for 20-25% of the total market share. The key players in the track and trace solutions market are based in developed regions such as Europe and North America. However, in the past few years, many smaller players specializing in pharmaceutical serialization solutions have emerged from niche markets. They are competing with global players based on product scope and innovation. The lucrative growth opportunities in the Asia Pacific and Latin American markets encourage market players to strengthen their presence in these regions.
DRIVERS: Increasing focus of manufacturers on brand protection
Counterfeiting is a growing threat for companies that bring to market medicines, medical devices, cosmetics, and pharmaceutical packaging. Growing international trade and the lack of stringent regulations have increased the use of counterfeit drugs and other products across the globe. Counterfeiting applies to both branded and generic products; that includes products with incorrect/false ingredients, without active ingredients, with an incorrect amount of active ingredients, and with fake packaging. Manufacturers invest large amounts of resources in developing a brand, and counterfeiters use this brand identity to sell counterfeit products. This creates significant damage to the original manufacturer & revenue and also hampers the brand & image. Hence, in order to prevent counterfeiting, the use of track-and-trace technologies such as barcodes and RFID is imperative. Many manufacturers use a combination of different track-and-trace technologies throughout their supply chain to enhance product traceability and security. A uniquely serialized product allows for item-level traceability across the supply chain, helping brand owners collect more information for deeper insights than lot- or container-level traceability. Thus, the growing focus of manufacturing companies is on brand building, which, in turn, is increasing the usage of serialisation and thereby driving the market for track and trace solutions.
OPPORTUNITIES: Remote authentication of products
Traditional brand protection technologies such as anti-theft and authentication are meant to protect individual items rather than protecting the entire supply chain. Hence, there is a possibility of false products being introduced at any stage in the supply chain. To combat this, solutions with automatic and non-line-of-sight capabilities are required. The demand for technologies with modular designs that meet enterprise needs has increased in the last few years. For example, track-and-trace technologies based on RFID maintain an electronic pedigree that tracks the transaction information of products within the supply chain. This approach proved to be a standout for protecting the supply chain against infiltration, theft, and fraud and supporting remote authentication in the brand protection supply chain.
RESTRAINTS: Huge setup costs for technologies
Track-and-trace technologies are capital intensive and necessitate large initial investments. The initial capital expenditure is a barrier to potential entrants. Moreover, heavy investments must be made in transport arrangements to ensure the timely delivery of products. Therefore, new entrants have to bear huge production costs and very low margins, as new facilities need a good amount of time to attain economies of scale. At the same time, these companies need to maintain their prices according to the prevailing market trend to survive in a competitive environment. Getting clearance from government regulators is one of the major problems faced by new entrants. These challenges are expected to restrain the market's growth to some extent.
CHALLENGES: Existence of technologies to deter counterfeiters
Some track and trace technologies come with their own limitations. For instance, RFID has limitations in terms of obscuration, orientation, and multiple tracking. Traditional anti-counterfeiting</a> methods that involve tamper-resistant packaging and special hologram labels can be inadequate, as counterfeiters can inexpensively duplicate labels. Barcodes, which account for the largest share of the market, are even easier to copy and account for a major share of the track-and-trace market. Hence, it is imperative to develop and implement next-generation technologies, that can deter counterfeiters and are cost-efficient for companies.
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“The software solutions segment accounted for the largest share in the track and trace solutions market.”
The software solutions segment accounted for the largest share—60.6 %—of the track and trace solutions market in 2021. The increasing awareness about secure packaging, the rising number of counterfeit drugs and related products, as well as the growing awareness of brand protection are the major market drivers for this market. The standalone platforms segment is expected to register the highest CAGR of 15.3% during the forecast period. The growth in this market is mainly attributed to the stringent government regulations for implementing serialization and increasing demand for standalone platforms to reduce the timeframe for the implementation of serialization.
“Serialization solutions segment is expected to witness the fastest growth in the forecast period.”
The serialization solutions segment accounted for the largest share—62.3%—of the applications market. This segment is projected to grow at a CAGR of 12.08% during the forecast period to reach USD 5,273.7 million by 2027, thereby making it the fastest growing segment. Stringent regulations for the implementation of serialization solutions in packaging and supply chain applications drive this segments growth.
“2D barcode technology account for the largest share in the track and trace solutions market.”
The 2D barcodes segment accounted for the largest share of 75.8 % of the technology market in 2021. The large share of the 2D barcode technology segment can be attributed to the growing adoption of 2D barcodes in the packaging industry owing to their large data storage capacity when compared to linear barcodes. The RFID segment is expected to register the highest CAGR of 13.2% during the forecast period due to the rising demand for these systems in automated pharmaceutical distribution and medical devices owing to low labor costs with improved visibility.
“Pharmaceutical and biopharmaceutical companies are expected to witness highest growth rate in track and trace solutions market in 2021.”
The pharmaceutical and biopharmaceutical companies segment accounted for the largest share of 52.9% of the market in 2021. This segment is projected to grow at the highest CAGR of 12.6% to reach USD 4,612.2 million by 2027. The large share of this segment is mainly attributed to the high drug counterfeiting activity globally and the increasing focus on restricting the entry of counterfeit products into the pharmaceutical and biopharmaceutical supply chain.
- In May-2022, OPTEL Group launched OPTCHAIN, a suite of the modular intelligent supply chain (ISC) that will enable easy capturing and digitization of Critical Tracking Events (CTEs) and Key Data Elements (KDEs) along the entire supply chain of the food and beverage industry.
- In March 2022, Zebra Technologies Corporation (US) launched Reflexis solutions across the Asia Pacific with the vision to have every asset and worker on edge visible, connected and fully optimized.
- In January 2022, OPTEL Group acquired the pharmaceutical track and trace unit of Korber to expand its expertise in pharmaceutical and agrochemical track and trace technologies, thereby expanding its foothold in the European marketplace.
- In April 2021, Syntegon entered into a partnership with Kezzler (Norway). This partnership will offer best-in-class solutions to effectively implement product digitization and traceability strategies with a minimal operational burden.
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