While Cambodia and Laos’ security market is growing, a significant portion of that market is dominated by Chinese brands which lure users with their attractive prices. This makes it more difficult for non-Chinese players to compete.While Cambodia and Laos’ security market is growing, a significant portion of that market is dominated by Chinese brands which lure users with their attractive prices. This makes it more difficult for non-Chinese players to compete.
It’s safe to say that, as far as security is concerned, Cambodia and Laos are inundated with Hikvision Digital Technology and Dahua Technology, the world’s No. 1 and No. 2 security companies according to asmag.com’s 2018 Security 50 ranking.
“After an industry reshuffle over the past two years, Cambodia is left mostly with Hikvision and Dahua,” said Ye Wangfeng, GM of Loxu Digital, the exclusive distributor of Dahua in the country. “Cambodia is a special country. Compared to Thailand and Vietnam where there are a variety of brands, Cambodia is dominated by only these two.”
“Right now the Chinese brands are very popular, Dahua and Hikvision,” said Michael Billen, Managing Director of Eyetech Security Systems, a Laos-based systems integrator. “We sell quite a lot of Dahua cameras, and Hikvision is very popular here now.”
Chinese investors play major role
One reason for this is the influx of investors coming from China. “Recently, with the Belt and Road Initiative, there is quite a few Chinese enterprises that came to Cambodia. They get office spaces, construction buildings and open stores,” Ye said. The Belt and Road Initiative refers to China’s development strategy involving infrastructure development and investments in countries in Europe, Asia and Africa.
Below are some examples of Chinese investments in Cambodia and Laos:
According to The Diplomat, the coastal city of Sihanoukville has already undergone an immense transformation due to an increase in Chinese investments and citizens since 2013. “Locals now dub the city Macau II, a nickname stemming from the proliferation of Chinese-operated casinos and Chinese citizens taking up residence,” the article said.
According to the Hong Kong Trade Development Council, in mid-2018 Cambodia's Ministry of Public Works and Transport (MPWT) announced that work had been completed on 2,000 kilometers of new roads, seven major bridges and a container terminal servicing the Phnom Penh Autonomous Port. All these initiatives had largely been backed by the Chinese mainland, with funding provided from within the framework of the Belt and Road Initiative, the agency said, adding the cost of the project is estimated at about US$255 million, with 95 percent of that covered by a concessional Chinese loan and the balance made up by the Cambodian government.
As for Laos, the value of Chinese investment in the energy and mines sector has reached $10 billion, according to a report by Asia News Network. It reports that the Chinese government is providing $5 billion to the Lao government and another $5 billion to support companies from China investing in Laos. “In energy cooperation, Laos and China are collaborating in hydropower investment with nine projects having reached their Commercial Operation Date (COD) and another 10 projects under construction,” the report cited Khammany Inthirath, Lao Minister of Energy and Mines, as saying.
For these Chinese investors, to protect their homes, offices and facilities, they need security, and it’s natural for them to choose Chinese products. “Business owners and developers from China … they will buy from the Chinese,” said Kuy Channeth, Sales Project Manager at Cambodia-based V-SAFE.
Increasingly, Chinese products are used in non-Chinese projects as well. “Examples include various government buildings, including the National Assembly and the tax administration,” Ye said. “It’s used in transportation projects as well, with Dahua cameras installed on traffic signals.”
A major consequence for the influx of Chinese products is increased competition as prices become lower, leaving non-Chinese brands in a weaker position to compete.