PRODUCT NEEDS
Banking is one vertical that does require video surveillance, providing forensic evidence in the event of a customer dispute or robbery. Government mandates for ATM surveillance are driving growth across Vietnam's 20 banks. More technical standards, such as day/night cameras to monitor safes, are being developed by the central police authority. However, current bank regulations allow each branch to select equipment as they see fit, with price usually being the deciding factor.
Competition is fierce for video surveillance, with an estimated 600 security companies operating in Vietnam, said Tran Hai Trieu, Director of TNT Technologies. As the overall market size is small, distributors cannot survive with a single offering. This means carrying solutions for all price points — high-end, mid-range and budget product lines. It also means diversifying product portfolios beyond video surveillance to access control and intrusion alarms.
One of the challenges for wider video surveillance uptake is a perceived lack of results. “In a well-known murder case in Vietnam, a camera did capture the killer's face, but the image was hard to identify,” said Duc Hau Do, President and CEO of Techpro. “In the end, the killer was caught by the police, but the camera did not serve its function.”
IP surveillance is seeing uptake in new projects, but analog solutions are still dominant for cost reasons, particular in corrections and casinos. However, users with multiple sites will invest in network video for remote monitoring. “IP is the future and is also happening now,” Le said. “However, it depends on the level of integration the owner wants to manage.”
Analog's market share is estimated to be as high as 80 percent, but IP is gaining ground. Some banks will deploy network cameras for all ATMs, with one bank installing nearly 3,000 cameras. Large high-end projects will almost all use network video, but analog still sees demand in smaller applications.
Management software and video analytics are starting to see increased adoption, as importers take note of their value-added functions. Silver Sea is working on its own traffic monitoring VMS to complete its portfolio, Vinh said. Access control is growing, but does not see much demand apart from mechanical locks. Electronic access solutions are limited to time and attendance applications, with Korean solutions seeing the most representation. “Video surveillance is a highly competitive market, while access control is not,” Trieu said.
Building automation is dominated by Siemens Building Solutions. It faces competition from Schneider Electric, which entered the market later. Both emphasize complete solutions as opposed to equipment, to manage elevators, air conditioning and lighting in large buildings.
HOT VERTICALS
Each vertical market in Vietnam is fragmented and requires a unique approach. They also have distinct differences that need individual solutions. Currently, the most active markets include critical infrastructure, transportation, financial institutions, industrial applications, residential homes, commercial buildings and retail. Growth is expected from private investments, as well as foreign direct investments, said Cong Duc Duong, President of Viet Phone.
Retail emphasizes entry-level offerings in video surveillance and intrusion, Tat said. Network cameras are seeing strong uptake for chain stores and supermarkets. For government projects, corrections is a significant market for security. There are currently 12 existing facilities nationwide, with a number of updates planned for sites dating back to the French colonial days.
LOCAL PRODUCTION
While most Vietnamese security players are distributors, some have changed their business models. Vantech started out as an installer, importing equipment from Asian manufacturers. As its distribution grew, it faced increased pressure from suppliers to meet sales targets and instead chose to assemble its own video surveillance products. “Our local production, along with service and repair team, has become our selling points,” said Brandon Lim, Overseas Business Director of Vantech. Its support team aims for speedy repairs, as technical issues with imported products can take much longer to ship back to the supplier for repairs or replacements. Vantech offers a three-year warranty, making after-sales service a priority, Lim said.
BUSINESS BOTTLENECKS
Several hurdles limit security growth in Vietnam. One issue is that users are very price-sensitive, said Trong Manh Ung, Technical Manager of Nhat Nam. As most users do not understand security, they choose the cheapest products.
This places the burden on the distributor to explain the value delivered by a solution. “Customers can't distinguish the good brands from the bad ones,” Duong said.
So it's difficult to sell expensive products.” Local installation know-how is also limited. “Large projects must hire foreign consultants or integrators,” Vinh said. “Basic understanding of installation has to be imported, or else local installers have no way to learn new knowledge or pick up new technologies.”
Along with a lack of hands-on experience, local security players also need to keep up with government rules. Policy updates take place frequently, making it tough to stay current, Tat said.