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INSIGHTS

Adriatic region in 2023: Unified market dynamics between East and West

Adriatic region in 2023: Unified market dynamics between East and West
In this year's survey of the security market of the Adriatic region, we interviewed nine representatives of well-known global manufacturers of security equipment. The findings are, without exception, positive.
In this year's survey of the security market of the Adriatic region, we interviewed nine representatives of well-known global manufacturers of security equipment. The findings are, without exception, positive. Business growth, diversification of projects, and utilization of advanced security solutions marked the past year in South-Eastern Europe.
 
The Southeast European security market has fully recovered from the effects of the pandemic, disruptions in the distribution chain, and inflation. Several years of uncertainty have turned into an opportunity for a new beginning in the form of more comprehensive security solutions and services that have applications beyond the traditional security framework. Producers and their regional partners have resourcefully resisted the economic and market challenges and are now achieving increasingly better results. There are many project opportunities and it's just a matter of being ready to compete in offering more customized, reasonably priced, and technologically sophisticated solutions.
 

Separate focus


We discussed the state of the projects in this flourishing field with the regional directors, key customer managers, and business development managers of nine big names from the security world: Ajax Systems, Avigilon (Motorola Solutions), Axis, Bosch, Konica Minolta, Suprema, Uniview, VIVOTEK and ZKTeco. Everyone spoke highly of last year's business in the Adriatic region and beyond, with the difference in favoring one country over another and certain verticals over others. Each country has its specificities, but it is important to note how the region, as a market whose constituents naturally rely on each other, establishes its recognizability as a link between Eastern and Western Europe. "Our notable success in the Balkan region, marked by a 36% growth from 2021 to 2022 and a subsequent 30% increase from 2022 to 2023, underscores the region's unique market dynamics and justifies its distinct focus apart from Western or Eastern Europe," says Artem Arifov, business development manager at Suprema Europe. He also specifies how the Balkan region offers a rich landscape of its globally competitive software development companies specializing in TnA solutions, for example. "This trend aligns with the growing demand for custom advanced TnA solutions among end-users, positioning Suprema favorably for continued success and innovation in collaboration with these local developers," adds Arifov.
 

The Balkan region offers a rich landscape of its globally competitive software development companies specializing in TnA solutions. This trend aligns with the growing demand for custom advanced TnA solutions among end-users.

 

Consistent and visible growth

 
"Our Adriatic region has many countries that are smaller compared to other Western EU countries, and whose development is affected by many different influences. Whether some of the SEA countries will be recognized as being safe for foreign investments depends on many factors. This is precisely what affects the development of the security market, so that each of the countries of the SEA region, with its specificities, affects the creation of the overall regional average. We estimate that the entire region will have an average growth of around 5%. At the same time, we also see Hungary as the only country that will have higher growth than this average,” says Danijel Jerković, CEO of the South East Adria Safety Solutions at Bosch Building Technologies – Security Systems. Regarding investments and their annual growth rates, Jerković analyzed their trends over the past ten years. Based on this, he points out that almost all countries in the southeast Adriatic region have had a similar growth in foreign investments depending on the year, between 1.2% and 4.5%. More positive trends are found in Slovenia which recorded growth in foreign investments of up to 6% for that period.
 
At Avigilon, a company owned by Motorola Solutions, they note uneven investment cycles from country to country, and from year to year. Yet, looking at the region as a whole, they note "consistent and visible growth, which applies both to EU countries and to those that they are not members of the Union,” adds Andrej Ćuraković, sales director for the Balkans and Middle Europe for video security and access control with the company.
Stjepan Šurmanović,
South East Europe
Key Account Manager,
Axis Communications
 

Manufacturers achieve success

 
Economic and investment trends have had a positive effect on all providers of security products and solutions in this area which, according to Axis, achieved 50% growth compared to 2022. "I still don't have an insight into the complete state of the regional market. But what I have had the opportunity to see so far are extremely positive indicators that suggest that all manufacturers on our market have had a great year," says Stjepan Šurmanović, Axis Communications’ key account Manager for South-East Europe which, apart from the countries of the former Yugoslavia, covers the markets of Albania, Bulgaria and Greece (from January 1st). For years, the Serbian market was the largest one for Axis in this region. But things are changing at the top. "Serbia did not disappoint in terms of end-year results in 2023, but the majority of our investments were in Bulgaria. The markets of Croatia, Slovenia, Serbia, and Bulgaria record a marked growth every year. But it is noticeable that the south of the region is also gradually rising and more interesting projects are now popping up in those countries as well. We have yet to explore the Greek market this year, but the entire Axis team for Southeast Europe is looking forward to this challenge because we believe that we know how to work with developing markets. We plan to use the experience gained from the development of the region in Greece and offer our partners a high level of cooperation and support,” points out Šurmanović.
 

Excellent success in Bosnia and Herzegovina and Serbia

 
Ilia Yashmakov, Sales Director,
Balkans & Adriatic, Ajax Systems

Along with Greece and Cyprus, Bulgaria is singled out as the best place for business in 2023 by Ilia Yashmakov, sales director for the Balkans & Adriatic at Ajax Systems. He adds that like "most European economies, the security market had very mild organic growth" and that 2023 was very successful for them.
     
 
Tsing Tang, Director of
Eastern Europe,
Uniview Technologies
Uniview, on the other hand, recorded double-digit growth in Serbia, but achieved the greatest success in Bosnia and Herzegovina - a 100% increase. "The success is particularly noticeable in Bosnia, thanks to the hard work of our partner and close cooperation with our Bosnian team. We successfully won several projects in the bidding and eventually achieved growth over 100%," says Tsing Tang, director of Eastern Europe at Uniview Technologies.
 
Significant growth is also expected at ZKTeco which has been present in the Adriatic region market for years. "We have a network of loyal partners that help us grow year after year. We have the strongest presence in Croatia, Serbia, and Albania. And we are looking for distributors in other countries of the region. Therefore, we still see a huge opportunity for growth," said Kinga Zarzycka, general manager of the distribution business unit at ZKTeco Europe.
 
Given that the region covers a large area stretching from Ukraine to Greece in the south and Slovenia in the west, the area of coverage is highly diverse for Đorđe Baćić, business development manager at VIVOTEK. Within the area covered, the largest market is Ukrainian due to the high demand for security equipment. "Even with increased demand for a country in war, business is difficult, so my job is to help partners in Ukraine as much as I can," says Baćić.
 

Economic and investment trends have had a positive effect on all providers of security products and solutions in our area.

 
 

Focus on the solutions that go outside the standard security scope

 
Vito Lalić, MOBOTIX’s business development manager for the Adria region at Konica Minolta, stresses that the growth trend continues in all markets in the region without exception, even in higher percentages than expected. He explains that this is mostly due to a series of solutions that are going beyond the standard security scope, with a focus on two essential security features. "The first one is business security, where we noticed that it is not just the standard focus on the protection (like perimeter protection) but rather on the manufacturing security via thermal EN54 cameras, for instance. It can give more results and information and provide a level of protection that a conventional camera cannot. Another type of market demand has to do with digitization and integration of data sourced from cameras such as traffic monitoring, monitoring the integration of logistics processes, and analysis of metadata. It can be used by several services for better planning and response. You can certainly feel the shift towards non-standard solutions,” says Lalić. In Konica's case, Croatia and Bosnia and Herzegovina excelled in the logistics and waste control sectors, while the other countries focused more on traditional security solutions. It is a motivation and a message for manufacturers to strengthen communication to make the market better aware of new solutions.
 

Positive business outcomes

 
All major global companies that participated in our survey reported positive business outcomes in the past year. They supplied their products and solutions for several projects from different verticals. This indicates not only the economic recovery of the Adriatic countries and increasing investments but also the diversification of the production portfolio of a large number of manufacturers. This allows them to occupy a position from which they can meet the increasingly complex demands of the market, such as those for more advanced analytical technologies in the mid-price device range.
 

Quality before price

 
However, the best news is the growing demand for quality solutions that adhere to European standards and norms. For decades, price was the deciding factor when choosing security equipment and services. Yet, the focus is gradually shifting to quality and reliability. "It was not easy to convince regional integrators to give a chance to and consider solutions that are not based solely on low prices, but rather provide value and a long-term business and technological perspective. Throughout this period, the market has rewarded our efforts and the idea that the cheapest is not always the best. And, ultimately, the cheapest is not exactly “cheap” in the long-term perspective of the prolonged life cycles of projects," says Šurmanović. He adds that Axis is recognized as a reliable supplier of solutions that provide added value to projects. This pioneering company in IP video surveillance, known for its work in the enterprise sector, has mostly implemented advanced solutions related to the protection of industry, critical infrastructure, traffic, and smart cities.
 

EN54 standard

 
Bosch continued its multi-year business growth in the region last year. The reliability of its brand name was a decisive factor in the selection of its equipment for tenders. "It is obvious that the markets in the Southeast Adriatic region are increasingly aware of the importance of implementing reliable fire detection systems within the framework of the EN 54 standard, and that they have found a reliable partner in Bosch. We are pleased with the increasing interest of installation companies in Bosch’s fire protection products and solutions,” says Jerković. What gives that company an advantage is its understanding of the specifics of the requirements of individual branches of the economy. "We can offer a wide range of solutions for very complex requirements that depend on the types of investments in individual countries within the SEA region. Thus, in eastern SEA countries, we are active in the health and industrial sectors of the economy, while in the countries of the central SEA region, the same goes for the industry, logistics, and transport", says Jerković, adding that they implement fire protection solutions in commercial and business centers in all countries.
 

Yet, the best news is the increasingly sought-after quality solutions that respect European standards and norms. For decades, price was the deciding factor when choosing security equipment and services, but the focus is gradually shifting to quality and reliability.

 
 

Demand for detailed analytics

 
Taiwanese manufacturer VIVOTEK has been most active in the enterprise vertical and this is reflected in its revenue structure. These are high- and mid-range camera models that provide additional value accompanied by high-quality analytics and in-depth video searches. Users are increasingly looking for more advanced solutions with new, more efficient analytical technologies. As the most interesting project in 2023, they point out the one implemented in Romania, where they delivered over 60 PTZ cameras and more than 200 bullet and dome mid-range and high-end cameras. "The project itself is interesting because we worked on covering a large open space where we created an automated solution with VIVOTEK analytics that triggers when a person appears and automatically directs the PTZ camera to that location. The PTZ camera continues monitoring the object as long as it is in its line-of-sight field. The combination involves 2-3 fixed cameras covered by one PTZ camera. The most important thing about this solution is that our PTZ camera can monitor more than one fixed camera. Entire communication between the fixed and PTZ cameras is direct, on a camera-per-camera basis. VMS does not have any functions, apart from receiving events", explains Baćić.
 

Projects in different verticals

 
The diversification of the portfolio and the quality of the equipment are the right measures of success. In any case, this approach to the market is applied at Avigilon. They highlight critical infrastructure, public administration, sports arenas, and retail as areas in which particularly strong growth is recorded. In 2023 they realized many strategic projects, both in the public and business sectors. Among these is the continuation of the project with the Nikola Tesla Airport in Belgrade and Rimac Technology, which chose them as a technology partner for their new campus in Sveta Nedjelja.
 
As for Suprema, which offers a versatile portfolio of solutions for access control, the company confirms that key projects in the Balkans took place in different sectors. They cite different verticals - banking, universities, government projects, and commercial/business centers. At the same time, Uniview boasts of securing one of the most famous music festivals in Europe - EXIT in Novi Sad - where their cameras protected visitors and participants so that they could fully enjoy the program.
 
According to Zarzycka, ZKTeco’s devices were very popular in gyms, hotels, and small and medium-sized businesses. As for references, they point out larger projects such as the Football Stadium in Osijek, the Viktor Lenac Shipyard in Rijeka, and the Valamar Riviera Hotel on the island of Krk in Croatia. For Ajax Systems, the Ukrainian provider of alarm systems, the residential sector is naturally in focus, but the more intriguing announcement is that they "will have a different answer" next year. They are probably alluding to the fact that they recently came out with an offer in the field of video surveillance for the first time. A new and serious player will eventually seek his piece of the pie in that extremely competitive market.


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