Booming verticals attract local players in Vietnam

When it comes to trends in Vietnam, demand for higher resolution is growing regardless of the region. Especially since the riot that broke out last year, demand for clearer footage is high. Given the current significant development of industrial zones, retail, and mixed-use buildings in Vietnam, there is significant demand for access control equipment. Users seek multi-functional products to maximize their investments.

For example, fire alarm systems are also incorporated with surveillance or door-entry systems. Do Duc Hau, CEO of Techpro, has also seen the need to be more integrated in order to fulfill security demands. “We are moving from simple product sales to system sales with our value-added services such as software development and system integration. We are confident to propose our total solutions to a big-scale project with multi-security technologies such as access control, video surveillance, alarm systems, anti-terrorism, and parking control based on an integrated management platform which can help users manage their system effectively,” he said.

Growing Sectors
Vietnam’s macro-economic situation has shown signs of stability. As the government makes plans to upgrade or roll out new projects, the security industry will grow along with the thriving economy.

In Vietnam, there are four major verticals that are booming in the security market — industrial parks, banks, infrastructure, and buildings.

Industrial Parks
As of July this year, there are a total of 299 industrial parks, with new industrial parks continuing to develop. With Vietnam’s large number of industrial parks waiting to welcome foreign investors, and new ones continuing to develop, security projects will also continue to roll out in this sector. Sembcorp Development started construction for its seventh Vietnam-Singapore Industrial Park (VSIP) last month, in Nghe An province. The VSIPs have attracted $7.9 billion in total investment capital to Vietnam.

Security demands in this sector include real-time and scalable monitoring, attendance monitoring systems, perimeter security, access control intercoms, biometric systems, product line quality control surveillance monitoring, and vandal-proof surveillance.

Buildings

The building sector has grown exponentially recently, with multiple projects under development, which will provide opportunities for security. For example, the tallest building in Vietnam, Landmark 81, started construction last year, and is expected to be completed in 2017. Only earlier this year, Bosch Security Systems’ surveillance products were installed in the Lotte Center in Hanoi, which is one of the tallest buildings in Vietnam at 65 floors. Indoor and outdoor IP PTZ dome cameras and IP dome cameras were installed throughout the building to monitor activities in the public, office, and residential areas to help deter and prevent crime. To provide better after-sales service, Bosch has also set up authorized repair centers in Hanoi and Ho Chi Minh City for faster turnaround time.

According to the International Finance Corporation (IFC), buildings account for approximately 20 percent of total energy use in Vietnam, and Vietnam is among the most vulnerable to the effects of climate change, such as global warming and frequent storms, which has led Vietnam to embrace green buildings. The IFC has launched a green-building certification program in Vietnam to encourage the construction of more resource-efficient buildings. As the first country in Asia to introduce EDGE (Excellence in Design for Greater Efficiencies) which enables buildings to reduce energy and water consumption by 20 percent and lower greenhouse-gas emissions, fresh opportunities arise for developers, which will bring Vietnam huge economic and environmental benefits. Together with Ho Chi Minh City’s plan to replace 29 dilapidated or ageing apartment buildings with new ones by 2020, the building sector is expected to boom in the next few years. Demands for this sector include building automation, energy efficiency, fire alarms, smart building solutions, and integrated surveillance.

Health Care
The health care sector is also growing, as security upgrades are required in hospitals to protect and monitor patients and staff, provide situational awareness to help officials plan effective response, as well as providing evidence for settlement disputes. Arecont Vision recently completed a project with the City International Hospital, the first integrated health care facility in the country to provide a comprehensive health care solution employing advanced equipment and a professional medical staff. Approximately 200 Arecont Vision megapixel cameras were installed in the hospital, including 100 megapixel panoramic cameras, 35 8-megapixel panoramic cameras, and 60 compact day/night megapixel cameras.

Banking
Banking is one of the key markets in Vietnam, with over 118 banks, and five state owned banks. There continues to be a growing number of branch offices being established across the country, especially in northern Vietnam, which plays a major role in surveillance growth. According to Sunny Kong, Director of Sales in Asia at Milestone Systems, the finance sector plays a part in Vietnam’s security market growth, as several bank headquarters are located in the North to drive new projects for surveillance to better protect their assets. “It seems from my observations the potential of government and finance projects possess a higher potential growth. The projects available in the North are defined as mega projects usually with over 2,000 channels of video surveillance per project at stake,” Kong explained.

More Local Brands Coming to the Market
The numerous prospects in Vietnam has led to more local brands coming to the market. In Vietnam, there are over 1,000 electronic physical security equipment and services providers, around 1,000 to 2,000 fire safety companies, and approximately 700 to 800 guard services companies. In Vietnam, many companies play the roles of systems integrators, distributors, and contractors simultaneously.

Though the majority of Vietnam’s security products are imported, local players have started to take part in the opportunities available in the market. New local brands such as Vantech, VDTECH, Questek, Seavision, and Escort are now in the game to take a piece of the action. With their own factories in Vietnam, local brands have an advantage as local assembly is more cost effective than imported products, thus having the upper hand when it comes to price competition.

Security Market Sets New High
As foreign investments continue to boom in Vietnam, fueling project development, local and foreign security providers are all jumping into the security market, which reflects on Vietnam’s growing economy. As the country gets back on track to steady economic growth, government plans for infrastructure projects in Vietnam will continue to roll out. Together with government projects and high FDI, the security market has reached new heights in 2015.