SEONGNAM, South Korea -- The coronavirus pandemic is reshaping the $36.6 billion global biometric authentication industry and one South Korean company is seeking to capitalize on the world's new aversion to touch.
CEO Kim Han-chul of Suprema said the Kosdaq-listed business is seeing a rise in demand for facial recognition technology from clients wary of possible coronavirus contagion from physical contact with machinery or devices.
"The pandemic has shortened the path for the facial identification market, which had accounted for less than 10% [of the entire bio authentication market]," Kim told Nikkei Asia in an interview this week at the company's headquarters in Seongnam, a city bordering Seoul.
Kim said that more companies and government agencies are adopting facial ID as a way to recognize their employees at office entrances, rather than using fingerprint and touch-based methods.
Suprema has been developing facial ID technology over the past decade but it was a hard sell before the pandemic due to relatively high prices. Now clients are willing to shell out for the company's advanced device costing 1.3 million won ($1,100), which is more expensive than touch-based versions priced at an average of 800,000 won.
Thanks to growing sales of facial ID products, Suprema's revenue, 80% of which comes from overseas markets, reached 31.4 billion won in the first half of this year, up from 24.8 billion won in the same period last year. Operating profit, meanwhile, climbed to 6.1 billion won over the same time frame from 5.3 billion won.
The Institute of Information & Communications Technology Planning & Evaluation, which is under South Korea's Ministry of Science and ICT, said in April that the global biometric authentication market will grow to $68.6 billion in 2025 from $36.6 billion in 2020, citing MarketsandMarkets data.
Kim said the next major step for bio authentication is to evolve into identifying people by means beyond facial recognition.
"Cameras can identify people by their movements and actions when they approach the entrance," Kim said. "It's possible to recognize them without facial ID. It's like a science fiction movie."
Kim's confidence for the future is built on what he describes as Suprema's strong research team focused on artificial intelligence. The company's products are based on using AI technology to collect more data on people's faces, actions and movements.
Suprema has targeted global markets since the early stage of its establishment two decades ago by Lee Jae-won, its founder and chairman. Lee, a former engineer at Samsung Electronics, grew frustrated with the dirty underside of South Korea's lobbying culture. Thanks to his international strategy, the company currently sells products in 130 countries including the U.S., U.K., France, Japan, India, the United Arab Emirates, and Mexico.
Clients include Lee's old company Samsung, Germany's Bosch, Telefonica -- the No. 1 telecoms company in South America -- and City Developments, a leading real estate developer in Singapore. Government agencies in the U.S., Germany, France, Singapore and India use its products as well. It also boasts English Premier League soccer clubs such as Liverpool FC and Leicester City FC as customers.
Other South Korean companies are also active in the facial recognition sector.
Alchera, established in 2016, is supplying its facial recognition software to a wide range of domestic clients such as electric utility giant Kepco, telecom company LG Uplus and Shinhan Card, as well as Japanese construction company Kajima Corp. Like Suprema, Alchera is listed on the Kosdaq.
"The company's technology is applied to many sectors thanks to government support [for the facial recognition market] and expansion of non-contact services," Nam Ki-yoon, an analyst at DB Financial Investment, said of Alchera. South Korea's facial recognition market increased to 151.4 billion won in 2020 from 86.8 billion won in 2015, according to DB Financial Investment.
Nam said that investors also need to pay attention to South Korean facial recognition startups such as ZettaMedia and CUBox as they are also expanding their presence in the market with their own technology.
Suprema, meanwhile, is also setting its sights on expanding its system enterprise business, which offers a package of software and control systems to companies. The sector has long been dominated by big global names including Honeywell.
"It's a conservative market," Kim said. "It can't be done in a day. It will take time."