What to expect from the Indian market next
What to expect from the Indian market next
Date: 2019/06/04
Source: Prasanth Aby Thomas, Consultant Editor
The Indian security market continues to grow at a healthy rate as more and more government projects get implemented, regulations on surveillance systems become more stringent, and overall security concerns remain high. However, the price-sensitive nature of customers has made it difficult for many international manufacturers to establish here.

But this could change in the near future if we are to go by comments from certain systems integrators (SI) working across verticals. Dhruv Pandya, Director at eSec Security Consultants, for instance, points out that as SIs look to climb up in the value chain, they would need to shift from companies that focus solely on the race to the bottom to those that can provide sustainable value to the business and end customers.

Pandya’s comments emphasize the concerns on margins that security businesses are facing at the moment. Several others in the industry hold similar views. Speaking to asmag.com at a recent trade show, Jiten Mohapatra, GM for India at ZKTeco said that there are almost no margins in the surveillance and biometrics industry because of the price competition.

“What is lacking in India is a proper union in the security industry,” Mohapatra said. “At the end of the day, we are all fighting for market share and the end users are getting the most advantage. There should be a proper union that can work toward regulating the prices and can ensure sustainable growth of the industry.”

What’s growing in demand?

In terms of verticals, government projects like smart cities continue to remain the most attractive for large SIs and solution providers. But this doesn’t mean that there is no demand in the other sectors. In fact, Pandya suggests that there is an increased interest in unified systems at the moment, that can make use of solutions like facial recognition and analytics.

He is careful to point out that unified systems are not just about integrating systems under a PSIM system or a VMS solution. As the number of cameras and other input devices rise, customers are interested to know about what can be done with the data collected, and to this end, software solutions and incident management strategies that can act on data are being considered.

There are other changes driven by technological advancements too. Despite being an emerging market, India is witnessing the entry of AI-based solutions. Roshan Bohra, Director of eSSL points out that while biometric solutions are still at a nascent stage in the subcontinent, there is a shift from traditional solutions to newer ones.

“I would refer to the biometric market as a nascent market, a market that is growing,” Bohra said. “Now, we have reached some sort of maturity in this market. Biometrics is moving from the traditional fingerprint and face recognition to an AI platform. This transition is not complete. It is going to take another couple of years for this transition to happen. The entire industry is now in a sort of plateau and looking for the next climb, which is AI.”

Challenges in the market

According to Pandya, the biggest challenge in the Indian market is still the lack of awareness among customers. There is still a perception that security surveillance is just about fixing a few cameras and recording the video. Customers are also not able to understand that cameras from two different companies, despite having similar specs, may not always give the same results.

Commoditization of products is another major challenge for SIs. This is yet another reason for margins becoming razor-thin in the market, forcing companies to struggle to keep their bottom lines in the red.

There is also a need for SIs to be able to think out of the box and customize solutions according to the customer needs, which vary from site to site. Being able to come up with creative designs that can provide the most value in the Indian conditions is what SIs need to focus on. Being able to scale their solutions also become crucial as this would ensure they are able to work on larger projects.

Market growth estimates

Analysts tracking the Indian security market remain optimistic about its growth prospects. The video surveillance market in the country is expected to grow at a CAGR of 13 percent in the five years ending 2023, according to Research and Markets. Reports from other agencies suggest markets for segments like biometrics could grow at a CAGR of about 31 percent in the five years ending 2021. These figures reinforce general sentiments from solution providers that the market is set to grow at a healthy pace in the coming years.

Ashish Somani, Director of Warner Electronics India said that the market should be growing at a rate that’s not less than 20 to 30 percent in the coming years. However, given the rapid change in technology, smaller companies may not be able to cope with the demands. Those with strong R&D would survive the competition.