Sitronics and state owned nanotechnology company Rusnano will launch a pilot project to integrate radio frequency identification tags (RFID) in the retail outlets of Russia’s largest food retailer, X5 Retail Group. The three way agreement was signed at the St. Petersburg International Economic Forum held in Russia’s Northern capital last weekend.
“With this unique project, Rusnano, Sitronics and X5 stand at the cutting edge of RFID technology in Russia,” Rusnano Head of External communications Sergey Filippov told East-West Digital News. “We believe RFID will eventually replace bar codes because of the advantages it offers to producers, retailers and consumers.”
Sitronics, Rusnano and X5 will invest 350 million rubles, approximately $12 million, in the project in equal parts over a two year period. The pilot project will be set up at the internal X5 “sandbox” outlet reserved exclusively for employees of the retailer and select partners. X5 will mark goods with RFID tags using its own employees at first, X5 Retail Group CEO Andrei Gusev told journalists.
Should the RFID project prove viable, X5 will open its first RFID-enabled store in 2013. Rusnano estimates the entire capacity of the Russian RFID tags market at 50 billion units a year. “The cost of the RFID tags is the greatest barrier to their broader use. Once RFID in retail trade begins on a large scale, the cost of the tags declines and RFID can be extended to other economic sectors,” Rusnano’s deputy CEO Andrey Malyshev explained.
“We expect this project to foster demand for nano-enabled products and other Rusnano projects related to RFID technologies,” he added.
RFID is a technology that uses communication through the use of radio waves to transfer data between a reader and an electronic tag attached to an object for the purpose of identification and tracking. RFID tags are essentially electronic identification for consumer goods. RFID tags improve product monitoring in the supply chain, protecting the buyer from counterfeit items and preventing inadvertent sale of expired products, particularly drugs and foodstuffs. While customers can experience an enhanced shopping experience, merchants can implement new marketing programs to boost sales.
But the use of RFID technology has also engendered controversy in some countries and even product boycotts by consumer privacy advocates
Sitronics is the high-tech arm of AFK Sistema, a Russian diversified conglomerate controlled by local tycoon Vladimir Evtushenkov.
Sources: EWDN, Rusnano
