China is not only growing as a manufacturing hub for the world’s security industry, but also as a market. iSuppli predicts that the Chinese surveillance market will reach US$11.4 billion by 2015, growing at a CAGR of 20 percent to become the world’s largest physical security market by 2020. The Indian security equipment and systems market has also grown 25 percent annually over the last three years, and the trend is expected to continue for the next five years. The markets, however, are not just for anyone to grab and take — localization efforts in innovation and differentiation remain key to winning local end users’ heart. For 2013, what do you need to look out for if you intend to be part of the growth in Chindia?
China is not only growing as a manufacturing hub for the world's security industry, but also as a market. iSuppli predicts that the Chinese surveillance market will reach US$11.4 billion by 2015, growing at a CAGR of 20 percent to become the world's largest physical security market by 2020. The Indian security equipment and systems market has also grown 25 percent annually over the last three years, and the trend is expected to continue for the next five years. The markets, however, are not just for anyone to grab and take — localization efforts in innovation and differentiation remain key to winning local end users' heart. For 2013, what do you need to look out for if you intend to be part of the growth in Chindia?
While the Chinese government's spending on infrastructural development has decreased after the 2008 Beijing Olympics, 2010 Shanghai World Expo and 2011 Shenzhen Summer Universiade, rapid urbanization and revitalization continue to drive the Chinese security market. The country has 10 cities with more than 5 million inhabitants and approximately 150 cities with more than 1 million inhabitants.
Verticals to Watch
New funds are being injected into projects in education, health care, industrial sites, telecoms, transportation, energy and aviation. A growing affluent middle class is also demanding higher-quality residential security equipment and services, with the segment accounting for 15.8-percent market share. The move toward higher-.jpg)
end equipment, such as intelligent, networked and digital systems, is also expected to drive the surveillance market over the coming year.
On the government front, the country's 12th five-year plan (2011 to 2015) to build digital frameworks for major cities by 2015 is well underway. A prime example would be the $1.2-billion city surveillance project in Chongqing, a city in the southwest, involving 500,000 cameras.
In the private sector, thanks to increased business travel as overseas businesses seek to establish a presence in the ever-growing Chinese market, the hospitality sector is on steroids. “We expect luxury hotels to continue to rise,” said Kyle Lai, Sales Manager at Ensec Solutions.
Needs Breakdown
Global Impact Consulting notes that much o f the safety and security demand in China will be in high-tech equipment, such as digital technology, entrance/guard communication systems, and network technology for inspection control systems and warning systems.
Another product segment with high growth potential is access control. According to IMS Research, China's access control market is estimated to grow at least 12 percent annually over the next couple of years, owing to increasing awareness of and demand for access control products in the commercial and residential verticals, alongside government-led projects in transportation and hospitals.
What's Driving India
IMS Research highlights India's city surveillance projects as the fastest growing vertical over the next five years, as the country has projects planned for most of the major cities in its 28 states. The Bangalore and Kolkata city surveillance projects are already in progress, along with the Mumbai project with 5,000 cameras starting in late 2012. Another vertical set for high video growth is the aviation vertical, where the revenues are forecasted to 
almost quadruple between 2011 and 2016.
“The Indian security market has been showing steady, yearly growth over the last five years; the annual growth rate is between 15 to 20 percent,” said Pramoud Rao, MD of Zicom Electronic Security Systems. “The growth was mainly from the government and commercial business sectors. The residential sector continues to grow but not significantly. For 2013, I expect this trend to continue without much change. Most demand will be for surveillance products, while other products and systems will continue to see incremental growth.”
For Sanjeev Sehgal, MD of Sparsh, the boom in the retail and real estate sectors, coupled with increased growth in other sectors such as education, infrastructure 
and aviation, accounts for the increased requirements.
As companies expand, they are finding it more and more difficult to manually manage security. Consequently, demand for electronic security systems, such as access control and time and attendance systems, has surged as banks, financial and insurance services, and public and manufacturing sectors deploy them for management and process control.
Last but not least is the highly publicized, biometrics-based Aadhaar UID project, estimated to cost almost $3.3 billion. For the 2012-13 budget, the Indian government has allocated almost $320 million, a year-on-year increase of 47 percent.
According to Ambadas Pote, Deputy Commissioner of Mumbai Police (Crime Branch ), security is an integral part of the nation's overall development. Since money spent on security is now considered an investment, rather than expenditure, he feels that the growth rate is likely to rise in the future.