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| The Chinese Video Surveillance Market
No. 1 Opportunity or No. 1 Threat?
In 2014 Chinese video surveillance manufacturers sent out a strong
message to the major western markets that they are moving up the value
chain with better than “just OK” products at significantly lower prices
than local offerings; and have extended and improved their distribution
network to include System Integrators and provide local back-up
The media and research companies have all warned that the Chinese
manufactures present a very serious threat to western products, which
we would agree with in some segments of the market. However some very
misleading figures are being published about their dominant size by
basing their revenues on total system compared against product sales
for western companies. They suggest that the only way to stem the flow
is to follow the Chinese model and lower their prices.
The only long-term solution is to innovate, improve the quality and
value of products and target growth markets. These are not only
solutions to protect the home market but are also positive measures to
increase their share of the largest and fastest growing market in the
world; namely China. So why not take on the completion in the high
ground where they currently lack leading edge products? It seems an
Most of the leading edge manufacturers have expended a lot of effort in trying to open up this market but sadly without much success. There seem to be 2 reasons for this. The first is that the public sector dominates the spend on Video Surveillance in China with most of this going to the massive Safe City projects and this protects indigenous manufacturers. In addition analogue cameras are still popular and the opportunity to win through IP Network cameras is not often possible.
Nevertheless with the private sector market opening up new opportunities and the fact that the penetration of security systems measured by sales per GDP in China is less than a third of that in western markets the latent demand for IP Networked systems will eventually have massive growth. There are strong indications that this is about to rapidly happen.
The Chinese government last year announced that they will invest in a massive research programme into the Internet of Things (IoT). Part of that programme will include making Safe Cities Smart and that cannot be done without IP network cameras. Western IP technology will be required here, because winning in the IoT game will bring a colossal impetus to growth and prosperity to all economies and protecting the interests of local camera manufacturers is not going to be allowed to get in the way.
Twice before over the past 50 years, information technology developed in the west radically reshaped competition and strategy; we now stand at the brink of a third transformation – the IoT. IP Nework cameras are a vital part of this transformation and are the Swiss Army pen knife of sensors. China needs these leading edge products and therefore we believe China is still the No 1 Market Opportunity for Video Surveillance.
For more information on the Global Security Market, including Video Surveillance and Access Control, view our report – http://www.memoori.com/portfolio/physical-security-business-2014-2018-access-control-intruder-alarms-video-surveillance/
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