Despite their continued growth, Malaysian security players are faced with various challenges — price erosion and users’ price sensitiveness being some of them. However these companies have demonstrated remarkable resilience, advancing their business to the next level — that is, providing integrated, intelligent solutio
Despite their continued growth, Malaysian security players are faced with various challenges — price erosion and users' price sensitiveness being some of them. However these companies have demonstrated remarkable resilience, advancing their business to the next level — that is, providing integrated, intelligent solutions to fulfill users' security and non-security needs. In this way, security companies have managed to survive and win out amid the competition.
Price erosion has become more and more obvious. “Price erosion is a problem. Last time we could sell a camera for 1,000 to 2,000 ringgit, now the lowest end you're talking about is 80 ringgit. How many should you sell to earn back the margin,” said Ryan Tan, Executive Director at EntryPass, whose sister company Bricomp is another distributor of Hanwha Techwin products.
Giving SIs price incentives is one way to help retain or gain new customers. “We provide price support and give our partners better rates. It's very common we need to sacrifice our own profit margin in order to get certain projects. For example, normally by selling this quantity we can earn 20 percent, but to get that project, we are willing to sacrifice the profit margin from 20 to 10 or 5,” said Brian Lee, Regional Business Development Manager at MicroEngine Technology.
Given customers are price sensitive, vendors target different segments by diversifying products. “For certain segments, we attract users' attention with less expensive prices, but at the same time we push other customers to buy mid- to high-end products to do projects,” said Weison Chiang, Product Manager at ACC Distribution, a distributor of Hikvision products. “Whereas the entry market focuses more on volume, we try to get our margin back from the high-end market.”
Meanwhile, similar to other markets, Malaysian security players are finding it more difficult to compete on single products alone. Providing integrated solutions to offer a one-stop shop for SIs and satisfy their various needs has then become a viable way to compete. “We don't just sell Hanwha Techwin; we value-add our solutions with Digifort's open VMS platform. This solution is competitive, they have a lot of built-in analytics as well as new facial recognition and license plate recognition solutions. Normally we'll bundle our cameras using this Digifort backend,” Tan said.
Vendors and distributors are also pushing non-security applications that help users meet their security and management needs, and none other vertical is seeing this trend more clearly than retail. “One of our ACTi-MAS solutions will be able to detect whether you are male or female and your age, according to their profiles on gender and age. Promoting products to your customers by displaying ads and related product information from the public monitor can smartly draw their attention and increase the efficiency of your marketing campaigns. We also have people counting solutions that can tell how many people are coming in and are they helping you generate revenue,” said Chuan Wei Yiaw, Director at CMC Solutions. “Today, camera is not only for security, it's for business intelligence as well.”
Some vendors are even employing AI- and deep learning-based analytics to assist users with their various objectives. “We have a solution that employs the deep learning algorithm from Sensetime. They are very focused on AI. They have a facial recognition algorithm that is actually cataloging all the faces that appear. If you are in a targeted list, an alert will pop up instantly, and it can do it quickly because of the algorithm built inside,” Tan said. “We're using the engine to develop different vertical applications, for example border controls, immigration and law enforcement who need this kind of application. Even now some major shopping malls also want to track blacklisted people. They want to know when these people have arrived so they can take action quickly.”