China Update (Part I): Building Brands with Quality and Trust

China Update (Part I): Building Brands with Quality and Trust

The global economic downturn has affected the security industry worldwide. While Chinese manufacturers have been less affected compared to other countries, they strive to overcome the "made-in-China" stereotype.

These vendors want customers to recognize that made-in-China products are not only affordable but are also of good quality. Honesty and trust are highly valued, together with services and fast market response.

Differentiation and value-adding make solutions stand out despite fierce price competition. A good handle on R&D is essential for company success. Self-developed technology and efficient production can help lower prices, making high-quality solutions more affordable.

More companies are investing in IP-based technologies, ranging from HD network cameras to NVRs with H.264 compression.

Video surveillance manufacturers are working to offer complete product lines in both analog and IP-based systems. Biometric and intrusion detection technologies are also becoming more mature and well-accepted.

The following 10 Chinese companies are presented in alphabetical order.

A&R Technologies
A&R Technologies, founded in 2004, began its international business in 2007. Overseas sales make up about 50 percent of the company's revenue, with the Americas and Europe being major markets. Sales is expected to grow 5 to 10 percent for 2010.

"We are focusing on the mid- to high-end market," said Alfred Lam, President. "We prefer offering top-quality products to show that we have good R&D and manufacturing capabilities. It helps us gain recognition."

A&R's major domestic verticals include museums, banks and government projects. For the U.S., the company's current sales are mostly OEM. For Europe, the company's own brand, Suren Systems, will make its debut in 2010.

Strategy and Core Competence
Motion sensors are core solutions. "We developed patented optical lenses and IR detectors," Lam said. "Our systems operate at temperatures under -40- to 55- degrees Celsius. With high-quality designs, our systems are sensitive and can prevent false alarms."

The company has tripled its R&D budget for 2010. "To keep our price competitive, we developed our own ASIC to lower production costs," Lam said.

Future outlook
A&R will have more integrated solutions combining intrusion alarms with outdoor video surveillance. "Experience in the industry is our other key strength," Lam said.

Axview Technology
Axview Technology launched its international business in 2007 and expects a 100-percent sales increase in 2010. Traffic monitoring, airports and chain stores are some applications for the company's solutions, which are deployed mainly in the U.S. and Europe.

Coming from an analog background, Axview has moved into IP-based product developments. Its products not only include a complete lineup of analog cameras and DVRs, but also megapixel network cameras.

"We developed our cameras with high-quality optical lenses, enabling superior image quality even under insufficient light," said Hazel Chen, Overseas Marketing Manager.

Strategy and Core Competence
Reliable product performance has enabled the company to grow. The company targets the mid- to high-end market with solutions that use Sony's and Hitachi's chipsets.

Service is key to establishing overseas markets. "Although we don't have overseas offices, we provide good after-sales services despite time differences," Chen said. "If customers want, they can test all of our products to make sure they are of high quality."

The company joined the ONVIF for compatibility to standards and protocols.

Future Outlook
With solid experience in the domestic market, Axview aims to offer total solutions to its international customers. "We will continue our training and investments in R&D, sales, marketing and management to offer quality products and better services to our customers," Chen said. IP-based technology will be the company's R&D focus, apart from its continuous analog development.

Domenor Technology
Domenor Technology targets the mid- to high-end market with quality OEM products. Its area of expertise is in speed dome cameras, "The U.S. and Europe are our major markets," said George Zhang, GM. "Through partnering with local distributors, system integrators and importers, we are able to serve different markets with quality products."

Strategy and Core Competence
The company specializes in speed domes and software algorithms. "With an experienced R&D team and constant feedback from local partners, Domenor produces high-quality and tailor-made solutions that fit different user requirements," Zhang said.

Domenor's products, particularly its intricately designed speed domes, are mainly used for traffic monitoring, airport and public safety installations.

Future Outlook
The global economic downturn has affected customer buying behavior. However, Domenor insists on providing high-quality products that are cost-effective. "Apart from our dedication to product quality, we also offer economical solutions for the small-to-medium business market," Zhang said.

Domenor strives to provide vertical-specific solutions. To offer the latest HD and IP-based video solutions, the company is working toward more technological breakthroughs in the near future.

HTS, a subsidiary of China Security and Surveillance Technology (CSST), offers video surveillance solutions at affordable prices.

With growth in 2009, the company is expecting 40-percent sales growth for 2010. HTS acts as an OEM and ODM, and it also has its own brands — Viewse and HTS. Viewse is sold overseas, while HTS focuses on the domestic Chinese market.

Airport, transportation, residential and education segments are major applications for HTS. About 50 percent of the company's overall revenue comes from the U.S., India, Brazil, Australia, Canada, Italy, Germany, the United Arab Emirates and Singapore.

Strategy and Core Competence
CCD and CMOS cameras are the company's core technology. "HTS has strong R&D to keep up with the latest technology," said Candy Lee, Manager of International Business Division. "We offer reliable IR cameras that have low image noise."

Under the umbrella of CSST, HTS has R&D support from Japan, the U.S. and South Korea. "In China, we have our own security school and our R&D team also partners with several well-known universities in China," Lee said.

Future Outlook
"We want to offer value-added products. China offers us the advantage of low labor and production costs, enabling us to offer affordable products with good quality and services," Lee said.

The company will offer 3-G network cameras with plug-and-play functionality. "We hope to move from the mid- to lower-end to the mid- to high-end markets," Lee said.

Jing Hua Long Safeguard
Established in 1999, Jing Hua Long Safeguard has experience in high-end applications domestically, including military, telecommunications and upscale residential communities. "Jing Hua Long maintains the largest market share in intrusion systems for the Chinese telecommunications industry," said Richard Lee, Sales Director.

Overseas markets originally accounted for the majority of sales but have waned due to the economic downturn. Domestic demand has picked up and become the biggest revenue generator since 2007, currently making up roughly 70 percent of sales.

For its OEM/ODM business, Jing Hua Long's main markets are Europe and Southeast Asia, with expansion to Brazil and Eastern Europe planned for 2010.

Strategy and Core Competence
With more than 20 patented products, Jing Hua Long solutions suit regional differences and specific applications. "The Association of Southeast Asian Nations provides an untapped market with a population of about 1 billion," Lee said. "Malaysia holds the greatest potential."

Future Outlook
The company will expand its portfolio for more applications, such as manufacturing and pharmaceutical factories. The company has also increased its branding efforts in Southeast Asia. In addition to brand expansion, 24/7 support and service centers will be established.

"A manufacturer's understanding of local needs should not depend solely on local partners," Lee said. "Combining accumulated technical experience and increasing research efforts are key factors to penetrate a market."

Lan Castle Technology
Lan Castle Technology dedicates itself to R&D, manufacturing high-quality consumer security products. In 2009, its revenue was US$29.2 million, with 70 percent of sales from overseas markets. The U.S., Europe and India are its main OEM and ODM markets.

Strategy and Core Competence
"Our strength is our ability to provide customized solutions based on customer requirements," said Jeson Sun, Deputy GM. "These include the exterior product design, operating system interfaces and other customized features."

The company has more than 20 years of experience in molding design and manufacturing. "Other than partnering with chipset companies and using high-quality and cost-effective components in our products, we have R&D resources in Taiwan, Hong Kong and the U.S. to develop quality products that are user-friendly," Sun said.

To satisfy users in different markets, Lan Castle offers integrated surveillance DVRs, 2.4-GHz wireless DVRs and DVR solutions tailored to supermarkets.

"We will add automated manufacturing facilities to increase our production volume and efficiency," Sun said. "This can lower our production and purchasing costs, enabling us to offer more cost-effective products."

Future outlook
Lan Castle puts customers first. "We will serve customers with high-performance video surveillance cameras, speed dome cameras and video communication systems," Sun said.

Minrray Industry
Founded in 1999, Minrray Industry expanded internationally in 2007, with significant domestic business. With 10 years of experience, the company enjoyed 40-to 45-percent growth in 2009, selling to the U.S., Europe and Southeast Asia.

Apart from OEM and ODM, the company also markets its own brand products. Analog PTZ cameras and radio conferencing cameras are the company's main products. "PTZ and HD cameras are our strength," said Jacy Xia, Marketing Manager. "Our PTZ cameras are especially popular in European countries such as the U.K."

Strategy and Core Competence
Differentiation keeps Minrray competitive. "We don't produce simple cameras with the usual designs," Xia said. "We target the high-end market but with affordable prices."

"An experienced R&D team and mature manufacturing build our success," Xia said. "All our products go through thorough quality checks."

Future Outlook
"To further improve our solutions, we listen to customer feedback to respond to market changes," Xia said. "Our R&D team also works closely with top companies in China and overseas partners, who advise us on better system design."

Apart from developments in HD, intelligent and IP-based video surveillance, Minrray will make its product line more comprehensive. "With more investments in R&D, sales, marketing and management, we're expecting another 40-percent sales increase in 2010."

Tungson Technology
Tungson Technology started its overseas business shortly after it was founded in 2001. Banking on its product quality and successful experience in the domestic market, Tungson's branded products are well-received in markets such as Europe, the Americas, Middle East, Africa and Southeast Asia. "Our top market is Russia, and we believe Turkey is the fastest-growing market," said Wuling Zhu, GM.

Tungson's overseas sales currently make up about 30 percent of the company's overall revenue. "We will continue to expand our overseas market," Zhu said. "For 2010, we expect a 30-percent sales increase."

Strategy and Core Competence
Tungson's main products include video capture cards, network cameras and embedded DVRs with in-house compression and software. "Our R&D team has strong know-how and the capabilities to make our systems user-friendly," said Zhu.

Insisting on quality control, Tungson develops and manufactures all its products in the company's own factories. "Our customers know they can rely on us because our products reliably pass our stringent quality tests," said Zhu. "High quality guarantees high ROI."

Future Outlook
The company will continue to expand with more IP offerings, such as network cameras and video servers. "The market is moving toward IP-based solutions, and we will continue to advance in technology and offer better services to customers," Zhu said.

TVT Digital Technology
TVT Digital Technology grew 35 percent in 2009, recording strong growth in Southeast Asia, South America and the Middle East.

TVT solutions are suited for commercial business and residential security, making up 50 percent of overall sales. "We will increase market share in the mid- to high-end market for applications such as financial, transportation and government installations," said Mike Kwo, GM.

Technology and Core Competence
Experience in R&D, sales and services are the company's strengths. TVT started developing M-JPEG and MPEG-4 solutions in 2001 and H.264 in 2007.

TVT OEMs, ODMs and distributes to partners overseas. With feedback from local partners and TVT's R&D team, it provides products suited to local needs. "Continuous communication with local partners help us serve customers better," Kwo said.

"The global economic crisis brings opportunities rather than challenges," said Kwo. "Customers recognize our high ROI more easily. We will focus more on product quality, services and branding to satisfy a wider range of user demands."

Future Outlook
In the future, the company will continue its R&D investments to increase competitiveness and reduce production cost. "We will continue to complete our product line with cost-effective solutions," Kwo said. "Continued partnerships with important market players help us strengthen our market position."

Fast market response and robust R&D are TVT advantages. It will release new product lineups for high-, middle- and low-end user needs.

ZK Software
Founded in 1999, biometric provider ZK Software started its international sales in 2003. Its main overseas markets are the U.S., India and the United Arab Emirates. Its market segments include financial, public facilities, education, airports and weapon storage.

"ZK sells through partners, system integrators and channel dealers. We have about 80-percent market share in China and more than 50-percent market share in the Asia-Pacific region," said Allen Pan, Manager of International Marketing Division.

In 2009, ZK's revenue increased 8 to 12 percent, with expected 2010 growth at 70 percent. "Due to the worldwide economic downturn, we saw an increase in the U.S. and European markets for time-and-attendance systems," Pan said.

Technology and Core Competence
ZK specializes in biometric algorithms and RFID. "Our biometric software can do 1:15,000 verifications at an affordable price," Pan said. "We have four-in-one biometric verification systems, and we also offer dual verification with fingerprint and facial recognition."

To keep its R&D team up-to-date, ZK partners with graduate students from well-known Chinese universities. It also works with overseas partners in Canada, Japan and the U.S. for product design.

Future Outlook
ZK's goal is to become the No. 1 biometric solution provider in China. The company will offer more biometric solutions, such as iris recognition and fingerprint recognition.

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