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Hikvision and Dahua's success: a double-edged sword

Hikvision and Dahua's success: a double-edged sword
Hikvision Digital Technology and Dahua Technology's rise to the top has trained the international spotlight on the Chinese manufacturing industry, opening the doors for domestic companies to expand abroad and further planting the "made-in-China" brand firmly in the global security market. However, it appears that being associated with the moniker and its connotation brings about challenges as well.

"Firstly, it's an opportunity because the label and identity of  'made in China' has already been established. Honestly speaking, Uniview can leverage the results of these two companies' efforts. However, it also presents as a challenge because the label has already been associated internationally with something that is 'low-priced, low quality.' Much effort will needed to relabel it as 'high-quality, high technology,'" said Ximen Yan, VP of Uniview Technologies.

Many companies have since then followed the legacy original equipment manufacturer (OEM) business model and are now in the process of establishing their own brands overseas, but it is still difficult for companies to gain brand recognition. "Our biggest challenge is branding. In China, most of the customers know who we are. But in the overseas market, almost all of the customers don't know KEDACOM. Potential customers feel amazed after watching our demos, but some of them still doubt if we own the technology or if we just bought it from others," shared Sher Ye, New Media Marketing Director at KEDACOM.

Nevertheless, the current market strategy of Hikvision and Dahua can work to the others' advantage as it can indirectly open up new avenues for growth. "Our biggest opportunity can come from their localization strategy. These can induce competition with bigger local manufacturers who might be their own customers. Their relationship may become unstable and that's where our opportunity lies," said Joe Qiu, Overseas Sales Director at TVT Digital Technology.

Industry Reshuffling is in the Cards
According to Benny Gu, Overseas Sales Director at BlueSky Technologies, Hikvision and Dahua's rapid expansion and domination over market shares will bring about far-reaching changes in the industry.

"This means that many small- to mid-sized enterprises will be eliminated. Industry reshuffling is inevitable."

Even though the impending situation sounds dire, some see it as an unexpected source of new opportunities. "When things settle down, local companies that are strong and experienced will experience rapid growth because overseas customers can now clearly recognize companies that are really invested in research and development," continued Gu.

The potential industry reshuffling would also be an opportune moment for companies to reevaluate their strengths and improve their brand in the industry. "With regards to the industry reshuffling or the resulting increase in market entry threshold, these can pose as both opportunities and challenges. The important thing is to take advantage of opportunities that come, continue to create innovations, enhance the influence of the 'made-in-China' label and position the company properly in its target market," said Johnson Jiang, Overseas Sales Manager of Hanbang Technology.

Chinese Manufacturers are Poised for Overseas Growth
Although several up-and-coming Chinese companies are evidently gaining ground in the international market, there is still a huge difference between them and the two reigning companies with regards to branding and experience. However, with their focus on research and development as a means of distinguishing themselves from the competition, these companies have the potential to raise their positions in the market from being mere manufacturers to also being innovators and brands in their own right.

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