Video surveillance equipment to see near 2-digit growth again

The global video surveillance equipment market is expected to register near double-growth this year thanks to strong demands from both public and private sectors, according to the latest research note from IHS Markit.
 
According to the market research firm, the market for video surveillance equipment, which includes cameras, recorders, analytics and video management software, is expected to grow 9.3 percent this year, expanding from 2018’s US$18.2 billion to $19.9 billion for 2019.
 
This will mark the third year in which the video surveillance equipment market has registered near double-digit growth, the note finds. According to the market research firm, the market grew 9.3 percent in 2017 and 8.7 percent in 2018, following weaker growth of 3.9 percent in 2016 and 1.9 percent in 2015.
 
This growth indicates strong commitment from both public and private users to invest in video surveillance products. “The professional video surveillance equipment market’s recent growth reflects the continued high spending on security in both the public and private sectors,” said Jon Cropley, senior principal analyst for video surveillance at IHS Markit. “On the public side, governments are investing in video surveillance equipment to enhance citizen safety and to equip smart city projects. In the private sector, companies are adding video surveillance gear to combat crime and to gather new types of business intelligence.”
 
Among other findings, the top 15 vendors accounted 65 percent of global revenue in 2018, compared to 52 percent in 2014, indicating further consolidation of the market. The note further confirms the IP video trend. According to the note, a total of 70 percent of all security cameras shipped in 2018 were network cameras, while global shipments of HD CCTV cameras or analog HD cameras, fell in 2018.
 

China’s surveillance market booms

 
By market, China is still the largest for video surveillance equipment. The note points out in 2018, the country accounted for nearly half of the global business, with 45 percent of worldwide revenue. It added China’s market expanded by 13.5 percent last year, while excluding China, the global market grew by just 5 percent.
 
“A major factor propelling China’s higher growth is the government’s Xue Liang program, which promotes investment in both city surveillance projects and the extension of city surveillance systems into surrounding rural areas,” Cropley said. “The Xue Liang program is forecast to conclude in 2020, causing China’s growth to decelerate after that year. However, in the meantime, Xue Liang will continue to generate strong growth for the Chinese and global surveillance equipment markets.”
 
The note confirms China’s continued dominance on the global video surveillance stage despite worsening trade relations between the country and the United States. Last year, the U.S. passed legislation to ban Hikvision and Dahua, respectively the world’s No. 1 and No. 2 video surveillance brands according to a&s’ Security 50 ranking, for usage in federal agencies, citing cybersecurity and national security reasons. The ban was signed into law in August last year and is scheduled to take effect August this year.
 
In reality, US federal agencies represent a small portion of the vast business of Hikvision, which earlier this month released its first-half results showing total operating revenue of $3.5 billion, a year-over-year growth of 14.6 percent. Whether the U.S. will place further bans on the company or put it on an entity list like it did to Huawei, whereby US companies are restricted to sell components to Huawei, remains to be seen.
 
The U.S. has granted a three-month reprieve to the entity list's enactment. Huawei, China's network equipment/consumer electronics giant, recently reported first-half results showing a 23.2 percent increase in revenue year-on-year, seemingly unaffected by the trade tensions thus far.