South East Asia Testing, Inspection & Certification Market - Forecast(2024 - 2030)

South East Asia Testing, Inspection & Certification (TIC) Market Overview

The South East Asia TIC Market size is estimated to reach US$4.7 billion by 2030, growing at CAGR 4.82% during the forecast period 2024-2030. The growth of South East Asia TIC Market is majorly driven by increasing need for food testing and rising safety regulations and standards for the enhancement of medical device safety measure. Moreover, the rapid growth of consumer electronics industry coupled with the increasing demand for electronics will also trigger the growth of the testing, inspection & certification market in South East Asia. The manufacturer of electronic products needs to comply with various governmental standards to ensure quality testing and certification through RoHS testing, Electromagnetic compatibility (EMC) testing, GS mark certification, CPSR and so on, which in turn drives the market growth of TIC (Testing, Inspection & Certification) services. Furthermore, the demand for TIC services which includes failure & damage analysis, various component testing, e-mobility & battery testing and others in automotive industry is also a major factor that can transform the South East Asia TIC industry outlook in the long run. 

The South East Asia Testing, Inspection, and Certification (TIC) market is undergoing significant transformation driven by multiple converging trends. The region's rapid industrialization and economic growth are increasing the demand for robust TIC services to ensure compliance with international standards and regulations. Advancements in digital technologies, such as blockchain, IoT, and AI, are revolutionizing TIC processes, enhancing the accuracy and efficiency of inspections and certifications. The growing emphasis on quality and safety in sectors like food and beverages, pharmaceuticals, and consumer goods is fueling the need for stringent testing and certification protocols. Additionally, the expansion of the manufacturing sector, particularly in automotive and electronics, is driving the demand for specialized TIC services to maintain quality control and meet export requirements. The rise of e-commerce is also contributing to the market growth, as online retailers seek to ensure product safety and authenticity. Environmental sustainability and regulatory compliance are becoming increasingly important, prompting companies to adopt comprehensive TIC services to meet green standards and reduce environmental impact. These trends collectively are enhancing the significance of TIC services in ensuring product quality, safety, and compliance across various industries in South East Asia.

South East Asia TIC Report Coverage

The “South East Asia TIC Market Report – Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the South East Asia TIC Market.

By Type: Outsourcing, In-house

By Types of Services: Testing Services, Inspection Services, Certification Services

By End Users: Agriculture, Automotive, Food, Consumers (textile, cosmetic, toys, apparel, furniture, stationary, hand tools), Medical & Life Science, Marine, Manufacturing, Building & Infrastructure, Industrial Equipment, Retail, Rail, E-Commerce, Meteorology, Others. 

By Geography: Indonesia, Malaysia, Sinagpore, Philliphines, Thailand, Vietnam, Others (Myanmar, Laos, Cambodia, Brunei, Timor-Leste)

Key Takeaways

• Testing Services held the major market share in 2023 owing to rising implementations of integrated testing solutions for wide range of end users including automation and control systems, battery storage, F&B processing, communication protocol and so on. 
• E-Commerce segment is analysed to grow at the fastest rate during the forecast period 2024-2030 owing to increasing internet and mobile phone usage, high penetration of IoT as well as improved e-payment methods& logistics. 
• Indonesia held the highest market share in 2023 Vietnam is analysed to grow at the fastest rate during the forecast period 2024-2030 owing to rapid growth of manufacturing sector and rising investments on railway infrastructure.
• The increasing demand towards food testing and rising safety regulations and standards imposed by global as well as regional government bodies for the enhancement of medical device safety measure are analysed to significantly drive the market growth of South East Asia TIC market during the forecast period 2023-2030.

South East Asia TIC Market Segment Analysis- by Type of Services

Testing Services held the major market share in 2023 with a market size of $1.7 Billion and is estimated to reach $2.3 Billion by 2030 with a CAGR of around 4.51% during the forecast period 2024-2030. The growth is mainly attributed to rising implementations of integrated testing solutions for wide range of end users including automation and control systems, battery storage, F&B processing, communication protocol, maritime equipment material, oil & gas structure and components and others to increase productivity and customer satisfaction. In September 2022, Intertek announced the launch of their new Vegan Foods Certification. The Intertek Vegan Certification is designed to determine the suitability of food products for vegan and plant-based consumers. These factors are set to influence the growth of global South East Asia industry in the long run.

South East Asia TIC Market Segment Analysis- by End User

E-Commerce segment is analysed to grow at the fastest rate of 9.84% during the forecast period 2024-2030. The growth of the E-Commerce in South East Asia is mainly driven by increasing internet and mobile phone usage, high penetration of IoT as well as improved e-payment methods& logistics. According to an article by Inside Monkey, E-commerce growth in Southeast Asia stands out at an 20.6% expansion in 2022, with sales reaching $89.67 billion from $74.36 billion in 2021 and is expected to pass $100 billion by 2023. Ecommerce sites or mobile applications need to undergo different tests including functionality, usability, security, performance, database and mobile application. TIC services judge the authenticity of the websites by testing the design, specifications, functionalities and various features to check their sanity and to ensure the protection level of the sites against any potential threats. Such benefits of these services drive the growth of TIC services market in this region. Moreover, the E-commerce sector in this region witnessing increasing cases of fraud and cyber-attacks which enhances the demand for testing, inspection and certification services in this industry. In Southeast Asia, digital payment methods are becoming increasingly accepted by most businesses and services today. According to a recent Kaspersky research titled “Mapping a secure path for the future of digital payments in APAC” published in April 2022, e-payment are the top encountered threat for most Southeast Asia countries including Indonesia (40%), Malaysia (45%), The Philippines (42%), Singapore (32%), and Vietnam (38%). Thus, significant rise in number of e-payment frauds can cater to the demand for testing, inspection & certification services within the industry.

South East Asia TIC Market Segment Analysis- by Geography

Indonesia held the highest market share of 20.9% in 2023. The economy of Indonesia is majorly driven by exporting of crude oil and natural gas and holds well established manufacturing industry, agriculture, mining and others. According to U.S Energy Information Administration, the production of petroleum and other liquids totalled 887,000 barrels per day in Indonesia in 2022, making it the seventh-largest exporter of liquefied natural gas, thus creating significant opportunities for the growth of the TIC Market. The rising number of railway infrastructure projects can be considered vital in fueling the market demand for quality testing, electromagnetic testing, and related inspection services for rail components used in the construction process within the country. In January 2022, the Indonesian Government announced the construction of the multibillion-dollar railway project with an estimated cost of $7.9 billion. It will involve the deployment of signaling systems, rolling stocks, and many related components. Such projects are bound to drive the need for railway operators or authorities to meet up with the required regulatory compliance, which in turn, can be considered vital in transforming the South East Asia TIC industry outlook in the long run.

South East Asia TIC Market Value Share, by Country, 2023 (%)

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South East Asia TIC Market Drivers

Rising Demand Towards Food Testing or Inspection due to Increasing Import/Export activities, Agricultural or Food Contamination, Food Safety Violation and Others is Surging the Demand for Testing, Inspection & Certification Services:

The increasing demand towards food testing owing to rising import/export activities, agricultural or food contamination, food safety violation and others is one of the major growth drivers boosting the adoption rate of testing, inspection & certification services in South East Asia. Food industry is considered as a highly regulated industry due to stringent regulatory compliance ensuring food quality assurance and safety for the consumers. The levels of product recalls owing to the presence of harmful ingredients or contamination or the undeclared presence of an allergen or not an approved additives are rising within the Southeast Asian nations. Moreover, the levels of agricultural trade (both export and import) are successively increasing owing to the population boost in various countries under scope, which will support the growth of the TIC market. As per World Bank 2021, the population of Philippines grew by 1.3% in the period of 2019-20. According to International Trade Administration July 2022 update, agricultural imports in Indonesia reached over $24 billion in 2021, owing to high demand for rice, wheat, soybeans, fresh fruits, dairy beef and various feed ingredients. The following marks an increase by $5 billion or 26% from 2020 import values. Furthermore, nearly 57.8% of the total import value regarding the agricultural products in the Indonesia market was dominated by five suppliers including China, Australia, U.S, Brazil as well as India. Such increase in imports can boost the adoption of food testing services which in turn can influence the market growth.

The Safety Regulations and Standards imposed by Global as well as regional government bodies for the enhancement of medical device safety measure is accelerating the growth of South East Asia TIC Market:

A major driver in the South East Asia TIC market is the implementation of stringent regulatory requirements across various industries. Governments in the region are increasingly adopting and enforcing rigorous standards to protect consumer safety, ensure product quality, and safeguard the environment. This regulatory landscape compels companies to adhere to strict testing, inspection, and certification protocols to gain market access and maintain competitiveness. The pharmaceutical and food industries, in particular, face heightened scrutiny, necessitating comprehensive TIC services to comply with health and safety standards. The automotive and electronics sectors also require extensive TIC processes to meet international export standards. The continuous update and tightening of regulations drive the demand for specialized and advanced TIC services, fostering market growth as companies strive to align with evolving compliance requirements.

The rising safety regulations and standards imposed by global as well as regional government bodies for the enhancement of medical device safety measure is creating demand for the TIC services which in turn triggers the growth of this market. The demand for Class III medical devices such as High-frequency ventilators, blood sampling monitors, oxygen supply units and so on have been growing overtime majorly amidst the pandemic as these devices are used to maintain or protect human life. Since these devices require licensed FDA approvals before distribution across countries, the market growth of TIC services is impacted significantly. Medical device testing is critical to the entire medical device development lifecycle to ensure the safety of patients and device users. In January 2021 the Philippines Food and Drug Administration (FDA) issued circular n° 2021-001 on the product standards to which Medical Devices must comply for notification or registration. The circular was issued so that local Manufacturers, Importers and/or Distributors must comply to obtain a certificate of Medical Device notification (CMDN) or a certificate of Medical Device registration (CMDR). In August 2021, FDA had released a list of Class-A 1242 product categories in its circular 2021-017, in order to support and clarify regulatory requirements for medical manufacturers looking for market access within Philippines. Under this, medical device manufacturers of Class A products specified under the ASEAN MDD, need to mandatorily obtain a Certificate of Medical Device Notification, (CMDN), before manufacturing, distribution, importing, selling, or advertising the medical devices within the country. Thus, rise in regulations and standards can boost the demand of testing, inspection & certification services among the medical device manufacturers.

South East Asia TIC Market Challenges 

Lower Level of Digital Adoption by the Key Players coupled with the Continued Impact of Bottlenecks in Trade Flows across South East Asia region owing to Shortage of Cargo Container are Limiting the Market Growth:

Low level of digital adoption coupled with continued impact of bottlenecks in trade flows acts as a major challenge restraining the market growth of TIC market in South East Asia. According to Rothchild & Co report published in May 2021, the testing-inspection-certification digital maturity substantially lags behind the other various end-user industries which shall pose problems in the long-run. Some of the common industries against which the TIC lacked under digital technology is energy, financial institutions, industrial goods, insurance, and telecommunications. Additionally, Shortage of shipping cargos, shipment cancellations, growing freight rates along with many others have emerged as some of the prime factors adversely impacting domestic manufacturing operations across various Southeast Asian countries owing to dependency on raw material imports within the country. According to Westports Holdings Berhad report, Malaysia faces a container throughput slipping 1% year on year to 10.4 million TEUs (20ft equivalent units) in 2021. Container throughput at Westports was down 10% y-o-y in 1Q2022, reaching 2.39 million TEUs versus 2.66 million TEUs handled in 1Q2021 which leads to supply chain disruption. These factors are limiting the demand for South East Asia TIC which in turn hampers the market growth.

South East Asia TIC Industry Outlook

Product launches, acquisitions and R&D activities are key strategies adopted by players in the South East Asia TIC Market. The top 10 companies in the South East Asia TIC market are:

1. SGS SA
2. Bureau Veritas
3. Intertek
4. DNV GL
5. TUV SUD AG
6. ALS GLOBAL
7. DEKRA SE
8. Eurofins
9. Cast Laboratories PTE LTD
10. Singapore Laboratory Services PTE LTD

Recent Developments

• In December 2022- Intertek, a leading Total Quality Assurance provider to industries, announced the launch of Intertek Green R&D, an innovative integrated solution that ensures the sustainability, quality and safety attributes of a product are maintained.
• In June 2022- DNV launched the MyISRS digital self-assessment tool. The service is estimated to aid organizations to run an online independent high-level survey for quality assessing applications. Some of the key industries in South East Asia that can benefit from the service include oil and gas, chemicals, utilities, power generation, telecommunication, pharmaceutics, transport, food, and beverage, and maritime. 

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