The Global Testing, Inspection, and Certification Market was valued at USD 207.75 billion in 2020, and it is expected to reach USD 294.01 billion by 2026, registering a CAGR of 5.41%, during the period of 2020-2025.? Owing to the significant outbreak of the COVID-19 pandemic across the world, the market witnessed a short-term decline in demand. Though the decline in revenues has been witnessed in the first quarter of 2020, a few prominent players witnessed significantly high demand for the testing, inspection, and certification services form select end-user industries.
- The advent of new technologies, and the high demand for inspection and testing at regular intervals across a few industries, such as oil and gas, the TIC market is expected to witness growth, irrespective of the industrial seasonality. - There is an increase in the volume of international imports and exports, especially for products, such as food and medical products. The Food and beverage, consumer electronics, agriculture, and automotive (electrical vehicles) markets are expected to provide more scope for TIC services. - Additionally, the environment-focused initiatives are driving the adoption of new testing standards, primarily with the aid of new technologies. For instance, the Detox campaigns, such as Greenpeace’s ZDHC (Zero Discharge of Hazardous Chemicals) campaign across Europe and America. This campaign aimed to reduce the usage of harmful chemical substances in the textile industry (the second largest polluter of fresh water worldwide). - However, trade wars and growth fluctuations have been challenging the end-user industries and with the recent outbreak of COVID 19, testing, inspection and certification market is playing crucial role by providing assurance that the product and services offered, especially in the healthcare sector, to the customers meet the fundamental safety and health requirements. TIC council directed respective countries to continue providing the TIC services for safety of workplace plant and machinery. - For instance, company such as Dekra and SGS are providing their TIC services with minimum disruption to their supply chain. However, the market is expected to experience slowdown in other sectors especially in transportation and manufacturing industries as the market has been significantly impacted by the lockdown strategy followed by the nations embracing the pandemic.
Key Market Trends Oil and Gas Industry Expected to Hold a Significant Share
- With inspection and testing at regular intervals across a few industries, such as oil and gas becoming mandatory, the TIC services are expected to grow in demand, irrespective of the industrial seasonality. - As a part of technical offerings, TIC vendors offer total quality assurance across various stages of oil and gas supply chain, which includes testing, inspection, and certification to other services, such as technical, consulting, engineering, and other related services. The industry brings distinctive set of challenges for operators, as the production and storage is dynamic and depends on market fluctuation. - In June 2019, Intertek Caleb Brett, a London-based testing laboratory company, announced that it is planning to expand its current inspection and testing services operations at St. James (Louisiana), with a new 5,000 sq. ft. laboratory. The laboratory is expected to handle operations related to oil and gas sector such as crude oil quality analysis and testing in accordance with ASTM methodologies and retain the services, including indefinite and retain capabilities. - Similarly, according to Westwood, the global drilling activity increased substantially during the first period of 2019, due to the resurgence in the gas market. Furthermore, owing to more high-impact exploration drilling activity, 51 exploration wells were completed during the year, as compared to 36 in the same period during the previous year. - According to the World Corrosion Organization, corrosion costs the global economy more than USD two trillion every year and almost 45% of the cost of this corrosion happens exclusively in the oil and gas sector. Real monitoring and continuous maintenance are mandatory in this sector to avoid any interruptions in import and export activities, which govern the global oil equilibrium. These factors are creating greater opportunities in this market.
Asia Pacific Expected to Witness Rapid Growth
- Asia-Pacific is anticipated to hold major share owing to the emerging markets such as China, India, Japan, and South Korea which have become attractive, through the development of indigenous industries and subsequent acceleration in exports, the introduction of stringent standards, and rapid urbanization. - The emerging markets, such as China, have become attractive spots, through the development of indigenous industries and subsequent acceleration in exports, the introduction of stringent standards, and rapid urbanization. - Furthermore, the rise of the middle class has led to a growth in private consumption and an increase in the demand for both safety and product quality. This ultimately offers growth opportunities in areas, such as food and consumer goods testing. One such example is the acquisition of TUV Rheinland’s food analysis laboratories in China, by Tentamus Group, in April 2018. - Then, companies in Japan have to pass through various approvals for the goods imported. Some of them include Optional S Mark Certification, SG Seal of Safety Approval for Mechanical Products, and DENAN & PSE Approval. - Semiconductor manufacturing being the major factors driving the growth of the Japanese economy, in July 2019, Hamamatsu Photonics constructed a new factory building at the Shingai Factory in Japan. It supports the company in meeting with increasing sales demand for opto-semiconductors, X-ray image sensors, and X-ray flat panel sensors. - Similarly, involvement of the South Korea in various trade agreements are helping in increasing the scope of TIC activities to other end-user industries. For instance, in November 2019, Indonesia and South Korea announced a free trade deal (CEPA), to remove tariffs on steel, textile, machine parts, and autos. 93% of Indonesia’s market may be open to South Korea.
Competitive Landscape The Testing, Inspection and Certification Market is highly competitive and consists of several major players. Although the market is fragmented, the market is dominated by three large players, namely, SGS, Bureau Veritas, and Intertek (approximately 25% of the total market share), and the top 10 players accounted for less than 40% of the TIC market. Enterprises across industries, like life sciences, utilities, and public sector, are still dependent on in-house TIC services. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability.
- January 2020 - SGS acquired Thomas J. Stephens & Associates Inc. (Stephens), a US-based clinical research organization that serves the cosmetic and personal care industry. The latter is recognized as one of the leading providers of safety and efficacy testing and contract research serviced. With this acquisition, SGS expanded its Consumer and Retail service portfolio in the clinical testing sector for cosmetic and personal care products.
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