Like North America, 2017 was also a growth year in the Asia Pacific region due to several factors, including government and private investments amid concerns over physical and cyber threats. A move towards intelligence, as seen in smart city and smart retail initiatives across the region, is also noticeable as users invest in products and solution to boost security as well as operational efficiency.
Like North America, 2017 was also a growth year in the Asia Pacific region due to several factors, including government and private investments amid concerns over physical and cyber threats. A move towards intelligence, as seen in smart city and smart retail initiatives across the region, is also noticeable as users invest in products and solution to boost security as well as operational efficiency.
China remains the biggest market not just in Asia but in the world, accounting for 29 percent of the world’s total security equipment sales in 2016, and the figure is expected to grow to 38 percent by 2021, according to IHS Markit. But elsewhere in the region, growth is pretty significant too, primarily driven by government projects as well as private investment in various verticals. While few incidents took place recently, past tragedies including 2002 and 2005 Bali bombings and the 2014 Urumqi attack in China continue to haunt government and private sector users as they invest in security to protect lives and assets.
One example is Japan which will be hosting the 2020 Olympics and Paralympics. “In Japan, the positive trend will continues until the year 2020,” said Yasuo Nagase, Chairman of
ASIS International Japan Chapter. “Security demands for 2020 Tokyo Olympic/Paralympic Games are high, especially for the video surveillance market.”
From safe cities to smart cities
Increasingly, safe city initiatives across the region use analytics and smart command centers to protect citizens against physical and cyber threats. In particular, smart command centers are supported with advanced analytics solutions to keep operators situationally aware. “Several years ago there was a stampede in Shanghai because a crowd was forming and all of a sudden a, panic occurred, and a stampede ensued,” said Walter Lee, Evangelist and Government Relations Leader for Global Safety Division at
NEC. “To deploy video surveillance today you won’t deploy just simple cameras. You want to have crowd analytics to look at crowd behavior, and you also have computer simulation to see if something happens on the street, where will the crowd run to.”
More and more, these safe city projects extend into smart city projects to facilitate and convenience the everyday life of residents as they drive, park, wait for buses or pay their bills. “You see more of that in all major cities in the Asia Pacific. If you go to Manila, they are into smart cities; if you go to Vietnam, they are into smart cities. In new cities they are building, they are making it smart,” Lee said. “In the past when you built a city you only consider drainage and power supply. But now when you build a new city you lay the cables and fiber optics to set the stage for a smart city.”
Overcoming price sensitivity
In certain markets, users are particularly price sensitive when it comes to making purchasing decisions. This easily leads to price competition and further price erosion, affecting companies’ profit margins and sustainability given a rise in various costs. One way to counter this is to diversify products, whereby security companies sell less expensive products to the lower segment of the market and push high-priced products for projects.
Another way is through the sale of higher-level solutions that help end users reduce total cost of ownership (TCO) and total cost of security (TCS). “The price sensitivity has not changed; it's always been there in many markets. What happens now is the concept of TCO and TCS,” Lee said. “If I Install just simple security solutions, I might still need to deploy 30,000 security officers in a city to secure a major event. But when I install intelligent video surveillance, I just need 10,000 instead of 30,000. As the solution gets more intelligent, it requires less manpower.”
As for 2018, the consensus is that it will be another growth year. A recent research by Future Market Insights (FMI) estimated that Asia-Pacific excluding Japan (APEJ) is anticipated to remain the fastest-growing market for physical security equipment. By the end of the forecast period of 2022, APEJ will become the second most lucrative region for growth of the market, it said.
Biometrics and other recognition technologies are expected to prevail in Asia. “To add values to the surveillance camera products, intellectual analysis like facial and other recognitions become key discriminators amid product commoditization,” Nagase said.
“I think biometrics will spread so far and so much that, they're saying that after 2018 the word biometrics will be passe, meaning you won’t say biometrics – you just assume that there will be biometrics features in your products,” Lee said.