The Asia security market has performed quite well in 2022. While growth varies by region, most markets enjoyed double-digit growth, which had largely to do with government initiatives on infrastructure and smart city.
The Asia security market has performed quite well in 2022. While growth varies by region, most markets enjoyed double-digit growth, which had largely to do with government initiatives on infrastructure and smart city.
Overall, the Asian economy had a good 2022. According to the International Monetary Fund, Asia as a whole is expected to see GDP growth of 4.9 percent in 2022. Within the region, advanced Asian economies are expected to grow an average 2.7 percent, while emerging markets are expected to grow 5.4 percent, IMF said.
This, then, has contributed positively to security in markets across the region. "After a couple of slower years during the pandemic, the security market picked up pace in 2022 following the ease of travel restrictions and pandemic prevention measures,” said Tony Wang, CEO of Convergint APAC.
"India’s electronic security market was valued at around US$1.3 billion in 2021 and has seen a steady growth continuing in 2022; overall, the industry is growing at a CAGR of 19-20 percent,” said Aditya Khemka, MD of CP Plus.
“Security market for Malaysia in 2022 has seen much improvements compared to 2021. We expect continuous growth in the overall market by year end of at least 30 percent compared to 2021. Since the lockdown, the majority of our clients pumped money into new stores and logistics/warehouses which gives us much needed sales,” said Ian Foo, Business Development Director of Malaysia-based Melectron.
COVID aftermaths waning
While COVID remains a health issue in various Asian countries, its impact on security is diminishing as businesses reopen and projects resume.
“During the COVID lockdown periods there was an impact, which was primarily due to no deployment and installation being possible. However on opening the demand more than bounced back,” Khemka said.
“Definitely the aftereffects of COVID will be there still, but to a minimal impact as majority markets has opened up,” Foo said. “End users and mid-tier projects are still our main driven sales, so when there is a need from clients, definitely they are willing to spend on security.”
It should be noted, however, that the range of cyber threats is growing, and Asia is no exception. “Cybercriminals are as business-minded as ever and employ more advanced tools and technologies,” said Amit Kulkarni, EVP of Cybersecurity at Allied Digital. “Most CEOs believe they are adequately ready for a cyberattack. A cyber incident of some kind is viewed as inevitable for almost every firm. Security teams must be ready to respond, recover from, and re-establish confidence as soon as possible to minimize the harm from cyber events, which are becoming more and more inevitable.”
Projects in infra, smart city hot
A key growth driver in the region’s security market is smart city and infrastructure development. Among the more notable infrastructure and smart city projects in Asia now are: Phase 1 of Shanghai Metro Line 21; Hai Lang LNG Gas Power Center in Vietnam, and the M4 Smart Motorway Project in Australia.
India also has their share of projects that can benefit security. “India is focusing on ambitious smart city projects and stimulating the transport infrastructure, meaning that all these new infrastructures are deploying security cameras, which has been augmenting the market growth for us,” Khemka said. “Many state governments in India are also playing a vital role by adopting video surveillance equipment to improve security and safety. Many states have incorporated advanced video surveillance solutions in their cities in 2022. For example, the Telangana Government is currently focusing on improving surveillance on the streets to upgrade Hyderabad’s safety, which is already the most surveilled city in the world.”
Price and supply chain issues
Inevitably, the global supply chain issue has affected Asia as well. As a result, shortages and price increases for security equipment were seen. Fortunately, vendors and suppliers showed resilience and flexibility to stay afloat.
“The supply chain issue has had a significant impact on the security industry across APAC and continues to be very challenging. Moreover, the issue is not only surrounding shortage of components and equipment, but also difficulties in terms of logistics. This is a real challenge for all producers and service providers,” Wang said. “In Convergint, we try to take a proactive approach and emphasize cross-regional collaboration, extensive communications, and ecosystem management to drive better results.”
“The higher specs the security products are, the shortage on chipsets are more serious,” Foo said. “Due to shortage of supply, increase in pricing is naturally what the market will do. But we tried to maintain as much as we can, but impossible for us to absorb the cost in the end. We have seen some items increased by 10-20 percent depending on the items. As we are lucky enough, before the increase of cost early 2022, we managed to place huge orders in year end 2021 which leveraged our overall costing.”
“The issue of insufficient IT infrastructure and cyber security supply has been prolonged to 2022 and I predict it will extend till 2023. Chipsets and semiconductors were hard to obtain as a result of the trouble, which resulted in delays of more than 400 days in delivery. There were numerous other issues besides pure chip supply chain problems, such as restricted Chinese companies. Freight prices rose because of logistic problems, causing manufacturers to increase the end consumer price,” Kulkarni said. “It appears that things will gradually improve, but there are still plenty of backlogs left from previous orders that may take up to 8-10 months to be delivered.”
Optimism prevails
As for 2023, Asia security is also seen with optimism. “I expect to see growth in the security industry across Southeast Asia and India, as enterprise customers continue to invest and expand in these markets. Oceania and Japan will also see growth,” Wang said. “I foresee an overall average growth rate in the APAC security market in 2023 of around 20-25 percent, but this will vary significantly between different vertical markets. Some of this is fed by mandatory demand, such as major critical infrastructure projects, as well as a backlog of projects which were postponed or delayed due to the pandemic.”
“The rapid growth that the security and surveillance industry is currently witnessing will continue in the near future. With wider adoption and aggressive uptake in the consumer segment and large infrastructure roll out we will be able to easily sustain the projected industry growth rate of 20 percent-plus,” Khemka said.
“For the whole Malaysia market overall, as long as new businesses are opening up, there will always be a demand for security products. With 5G rolling in soon in Malaysia, we might see an increase for higher specs of security products overall in Malaysia market. But we still need a younger generation of users to be able to absorb all the new tech gadgets as they are the new market which is most likely to make us of what latest security products we have,” Foo said.
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