With doubts about the eurozone, many companies are looking into other markets. This will help businesses diversify their portfolios and minimize regional risk. The spotlight in recent years has focused on Asia — with reason. Asia includes many of the world’s fast-growing, high-potential economies, such as China, Taiwan, Russia, Korea, India and Indonesia.
With doubts about the eurozone, many companies are looking into other markets. This will help businesses diversify their portfolios and minimize regional risk. The spotlight in recent years has focused on Asia — with reason. Asia includes many of the world's fast-growing, high-potential economies, such as China, Taiwan, Russia, Korea, India and Indonesia.
As Simon Siew, MD for APAC, HID Global (an Assa Abloy company), said, “We are targeting new market segments where we believe have strong growth potential. Since the 2008/9 recession, we have grown considerably in [Asia], which is still an unsaturated market. There is a lot of room for growth, and I believe with the right solutions, we can spur greater demand and look to surpass the European sales organization in the coming years.”
Guy Chénard, VP of Worldwide Sales and Business Development, Genetec, emphasizes the potential in the APAC markets. “APAC is our ‘last frontier,' accounting for about 6 percent of our total sales. Our overall growth target for 2012 is 36 percent, with video expected to grow by more than 30 percent and access control more than 70 percent.”
Daniel Chau, Marketing Director for APAC, Honeywell Security, explained a little behind the success of Asia. “In APAC, government and police attention, better standards of living, and foreign investment and capital expenditure have been strong driving forces, and the region has actually become the center of IP-based video surveillance.”
Without a doubt, much of the attention on Asia is focused specifically on China. Though uncertainties remain about the Middle Kingdom, its huge market potential has seduced businesses the world over. David Grinstead, VP of Worldwide Sales, Tyco Security Products, said. “China is not an emerging market; it already emerged, and the growth is phenomenal. We have also doubled our investment in China.”
IMS Research explained that the boom in Chinese security started in 2006 with the government's launch of its nationwide “Safe City” program. “As a result of this program, the market peaked between 2008 and 2010, during which time the Beijing Olympics, Shanghai Expo and Guangzhou Asia Games were also successfully held, and a massive US$600-billion (RMB$4-trillion) government stimulus funding was injected into the economy,” said Paul Everett, Research Director.
Frost & Sullivan predicts that the video surveillance market in China will continue to grow more than 30 percent year on year to 2015. Speaking about IP video, William Ku, Brand Business Director for Vivotek, said, “We have had very strong growth here from 2009, thanks to ongoing government initiatives and a complete supply chain. IP video in China is growing at 33 to 35 percent per year.”
One of the major drivers for IP-based video in China is an emerging requirement for HD video. “A good example of this is the Beijing police ordering all supermarkets and shopping malls to install HD security cameras,” said Bo Zhang, Senior Analyst at IMS Research.
Gert van Iperen, Charman and President of Bosch Security Systems, mentioned the meteoric growth of network videos in China. “Four years ago, we were talking about DVRs in China, but the market is moving now with increasing speed to IP and HD. Originally, we thought China would become our second largest market in 2013, but It is already in 2011.”
Opportunities also abound in the access control markets. Eric Chiu, Director of Sales for China, HID Global (an Assa Abloy company), said, “Globally, while China is not our biggest market, it does boast one of the highest growth rates, with doubledigit CAGRs projected for the next five to 10 years.”
“A significant part of future growth within the Chinese access control market will be generated from mid-end projects (50 to 199 doors), with a focus on port, rail, commercial, government and hospital projects,” Everett agreed. “Large government-led programs are moving aside, giving way to commercial and industrial projects of a much larger size than in previous years.”
Though there has been talk about price sensitivity and decreasing margins in Asia, an interesting phenomenon is emerging from China. “There are two extremes in the Chinese market: one where unit prices are key and changing very fast, and the other where end users are willing to pay $300,000 to $450,000 for consultation just to get system planning right,” said Tyrone Huang, GM for Security and Fire Solutions in China, Siemens Building Technologies.
Given the huge potential, there are still challenges with trying to move into new territories. Siew spoke of problems in China and another rising Asian star, India. “The challenge in these countries is twofold. One of the issues is evangelizing and promoting technology solutions in nascent marketplaces with channels which aren't very well-developed, but certainly desire to move forward quickly. Secondly, there are intellectual-property challenges that require additional attention. Despite these challenges, China and India represent tremendous growth opportunities.”
Charles Cousins, MD of APAC, Genetec, echoed similar sentiments. “Our biggest challenges in APAC are network evangelization and customizations. For big systems to work properly, consultants, channel partners and end users need to understand the intricacies of networking and storage technologies.”
However, given the past few years, security players are accustomed to dealing with trouble and are ready for changes in Asia and the rest of the world. Yasushi Matsumoto, Manager for Asia, Global Marketing Group, Security and AV Systems Business Unit, Panasonic System Networks, “After the 2008 recession and 2011 earthquakes and floods, we are as prepared as we can be for any market uncertainty and dynamics.”