The Indian market has as many challenges as it has growth factors. The Indian electronic security market is characterized by increasing corporate and public awareness, high growth and huge untapped potential. There are also price sensitivity issues, the presence of a large number of importers and systems integrators, local assembly and manufacture, and the emergence of a few large distributors.
Systems integrators will play a vital role, as the market is shifting from being product-centric to solution-based integrated systems with high levels of customization.
Fast growth and high untapped potential will lead many international companies to establish direct or representative offices in India, thus increasing competition.
Product companies will increasingly focus on mid and low-end markets, which are expanding; this will lead to emergence of many small system integrators that cater to these segments, thereby increasing market fragmentation at the low end of the market. However, the high-end market is expected to witness a consolidation trend with many large system integrators merging, being taken over or forming alliances.
For product companies, the increase in market presence of third-party system integrators will lead to improvement in product and technology support that will be extended to these system integrators.
Structured distribution channels will be set up by industry participants as the market spreads into Tier-II and Tier-III cities. Large warehouses and distributors, and many small value-added dealers and intermediaries are likely to emerge.
Availability of an increasing number of multinational brands will lead to an increase in brand-building activities by product companies, especially among consultants and system integrators.
Since price differences among brands are expected to continue to remain marginal, the key factors technology, reliability and service supportwill give the required competitive edge to both system sales as well as product companies.
For system companies, service support will be one of the most important factors that will decide market dominance, along with ability to provide related application and customization especially for product segments such as access control and video surveillance systems.
As customized solutions become the need of the hour, products more suitable for the Indian market will emerge, thereby increasing localization of products.
The market will witness significant widening of the market base due to increase in awareness and fall in prices.