Economic growth in India has slowed. IHS expects that GDP in Asia's third-largest economy will grow by just 5.1 percent in 2012, down from 6.9 percent in 2011 and 9.6 percent in 2010. However, despite this background, spending on video surveillance equipment has remained resilient.
Economic growth in India has slowed. IHS expects that GDP in Asia's third-largest economy will grow by just 5.1 percent in 2012, down from 6.9 percent in 2011 and 9.6 percent in 2010. However, despite this background, spending on video surveillance equipment has remained resilient. Although some customers have put off spending until the economic environment is brighter, the Indian market will still enjoy healthy double-digit growth in 2012. What is more, average market growth of almost 20 percent is forecast over the next four years.
Despite this, doing business in India is not without its challenges. The market is very price sensitive and a highly fragmented supply base means that customers are able to shop around. The market for analogue cameras in particular is served by many small Indian suppliers that rebrand products from low-price OEMs in China and Taiwan. However, even the market for network video surveillance equipment is highly competitive. The major global suppliers all offer their products in India and most of them have local sales offices.
Very few companies manufacture CCTV and video surveillance equipment in India. The vast majority of equipment suppliers import products from other Asian countries, such as China and Taiwan. This means that transport costs, insurance costs, and import custom duties must be added to the price of such products; this typically adds over 30 percent to their price. Nevertheless, not all CCTV and video surveillance products are purchased directly from vendors and there is a sizeable “grey market”, particularly for analogue products, in which equipment is either bought second-hand or transferred from users in other countries.
Sparsh and Electronic Eye Systems are both companies that already manufacture CCTV and video surveillance equipment in India. However, a few other Indian companies assemble parts of CCTV and video surveillance products in India and these companies do manufacture some components.
Some of the major distributors in India also have their own CCTV and video surveillance equipment brands. One example is the distributor Aditya, which sells equipment from vendors like Dahua, Samsung, and Maximus but also sells equipment from CP Plus, which has its own brand. Another example is Lookman, which sells equipment from vendors like Sony and Raysharp, but also sells equipment from Secura, which has its own brand.
The unique characteristics of the Indian market make it an exciting place to do business. What is more, compared to other high growth markets, barriers to entry for foreign-owned suppliers are much lower. India will remain an important growth market for these suppliers for many years to come.