Vietnam Ready for New Spring in Security

Market Drivers and Needs
Public demand for security products has increased and the market is developing fast. “However, consumers getting confused by the array of brands to choose from,” said Hoai An Nguyen, CEO of An Nhien. “They have yet to understand the quality of each brand.” The average income in Vietnam is higher than before, meaning that the public is able to afford security commodities now, said  Deputy Director of Trung Loi Trading. Growing demand for security and a wealthier population are among the strongest drivers in the Vietnamese market.

The market is still in the nascent stages for security technology and depends on manned security. Commercial opportunities look promising for security vendors, particular intrusion and perimeter anufacturers.”

Industry experts unanimously agreed that price concerns drive buyer procurement decisions in the commercial sector. “End users tend to look for products that are easy to use with competitive pricing and excellent aftersales services,” Nguyen of Vantech said.

Budget is a great concern for local buyers, which increases price competition in the low-cost bracket. Manufacturers in this bracket include Chinese low-cost products, which even locally made products have a hard time competing against. Locally made products in the low-cost bracket are below quality standards expected in other markets, but have greater advantage as a result of lower production costs and tariff exemption, Wu said.

To avoid getting caught up price wars, some companies are offering mid-range products to strike a balance between price and performance, said , Sales Manager of Nam Phu. Others focus on offering total and hybrid solutions for more flexibility and added-value. “Vietnamese end users demand flexibility in the products used for solutions, so analog, IP-based and hybrid products must all be available in order to satisfy customer demand,” Wu said.

There is great demand for security from the Vietnamese government, larger corporations and international institutions such as embassies and governmental administration buildings, said Jeff Mei, PM of International Integrate Center, China Security & Surveillance Technology. Compared to the commercial sector, government projects prefer high-end products, such as ones made by Bosch Security Systems, Panasonic System Networks and Axis Communications. Government procurement agencies frequently choose US and Japanese products, Tat said.

The government sector has always been a keen adopter of intrusion systems, especially for military installations in the southeast Asian region, Oswal said. “Looking at the private sector, many of the new commercial buildings are looking at intrusion system for perimeter security purposes. The declining cost of intrusion systems is expected to become more attractive to end users when fulfilling their security requirements,” she added.

“Local government prefers high-end products for projects, as they want to make worthy investments and be able to use a system for a longer duration, achieving greater ROI in the long run,” Nguyen of Visco said.

Video Surveillance
Two trends will spur video surveillance growth in Vietnam. First, HD network surveillance and video analytics will have great potential when basic infrastructure is in place. “Network cameras are manageable in terms of transmission in large installations; therefore network surveillance is expected to show exponential growth in many vertical markets,” Oswal said. “However, the uptake of the technology on a larger scale may take some time.” Some network speed domes are used in the southern region currently, although not on large scale, Wu said.

There is a desire within enterprises to have their infrastructure on one network, and IP-based systems will grow as IT professionals set up the required infrastructure. “Video analytics will drive network camera adoption, as people start to realize the importance of getting detailed information,” Oswal said.

Technological advancements will result in increased affordability for security electronics. For instance, falling prices for hard disk drives over the past few years has enhanced video recording and increased the quality and capacity of video storage equipment.

Vertical Markets
Awareness and uptake of IP-based products is slowly growing in Vietnam, although analog products still dominate with 70 percent market share. Government and telecommunication projects are prevalent in Hanoi, while commercial opportunities can be found in Ho Chi Minh City. As Vietnam continues to develop, electronic security equipment is needed in critical infrastructure (airports and seaports), public and residential buildings, commercial facilities (banking) and educational institutions. Other emerging vertical markets include retail, health care, traffic monitoring, telecom data centers, hotels and recreational complexes.

Industrial production is one of the biggest draws of Vietnam, with its young labor force and stable government. “Factories have the most growth, especially in Ho Chi Minh City and nearby provinces like Dong Nai and Binh Duong,” said Vo Nguyen, Technical Director, Vantech. Most factory projects comprise roughly 50 to 150 cameras per project, with speed domes seeing great demand.