The A&S 2008 sourcing survey, which was based on replies from 81 international buyers, indicated that the Chinese electronic security industry occupies a well-deserved place in the intensely competitive global market. Cost efficiency and added value — product innovation, new functions and software — are giving Chinese suppliers the edge.
A&S China Best Buys, a major platform connecting international buyers and Chinese suppliers, conducted its 2008 sourcing survey on 81 international buyers. Among these, 29 percent were wholesalers and distributors, 25 percent importers and agents, 16 percent installers, and the rest consultants, system designers and end users.
International buyers came from the U.S., Japan, Singapore, Indonesia, Greece, Uruguay, Turkey, Canada, Australia, Korea, South Africa and the U.K. Among these, the following sourced at least 70 percent of their product from China: Select Engineered Systems (U.S.), Sector Ltd. (Greece), ADS Surveillance Engineering (Singapore), Furkan Engineering (Turkey), Vigilance Security Sdn. Bhd. (Malaysia), BS Technology (Korea), VP Sales (U.S.), Tiger Product Pte. (Singapore), Farhad Daneshvar Trdg. (UAE) and Securefast Plc. (U.K.). Respondents were mostly from top management.
Enhanced Global Competitiveness
When asked country and percentage of their electronic security sources, 67 bought products from China (including Hong Kong), 54 from Taiwan, 36 from Korea, 24 from Japan and 20 from others. Among the 67 surveyors who bought products from China, 22 percent (15) sourced 60 percent or more. The diagram below indicates international buyer satisfaction with Chinese electronic security products.
When asked about the popularity of Chinese electronic security products in their local markets, 58 percent (47) replied in the positive. As stability and quality have improved, customer loyalty has been strengthened. The diagram above highlights years of purchase.
As for 2008 Chinese product purchase plans, 88 percent will increase their share, among which 32 percent will increase this by 10 percent, 26 percent by 20 percent, 19 percent by 30 percent and 1 percent by above 30 percent.
The huge domestic market is also giving Chinese electronic security manufacturers enhanced cost efficiency. When asked about their selection criteria when it comes to Chinese product, 47 percent chose cost efficiency as the top factor. Stability and quality were also frequently mentioned. "The quality of Chinese products has improved radically during the last several years, " said Sakis Stoitsas, Managing Director of Sector Security Systems and Services Ltd., a Greecebased company. "Their prices are usually excellent, especially in comparison with local dealers (suppliers). That often delivers profits in excess of 100 percent." Thanks to increased awareness of intellectual property rights and enhanced protection of the same by the Chinese government and individuals, innovation is rising to the fore. In fact, product innovation and new functions were listed as the top factor for many international buyers when it comes to Chinese products. A diagram on selection criteria is provided below:
Cameras and DVRs have also seen technological advancement. Among the electronic security products that international buyers would like to buy from China, cameras (13 percent) and DVR/ NVRs (10 percent) were ranked as the top two. "We are looking to buy Chinese cameras and DVRs," said Stoitsas. "We already buy electronic article surveillance (EAS) products exclusively from the Chinese market."
Access control products came in third with 17 percent of products sourced from China being used in government and public security applications, 15 percent for retail and 11 percent for education and schools.
As labor costs, inflation and the value of the Chinese yuan rise, Chinese security manufacturers face huge challenges. This means that they can no longer depend on cost efficiency. Companies like Sunell, Sebury and BlueStar are strengthening core competitiveness by buttressing software R&D. Half of Sebury revenue goes into R&D and brand building; at BlueStar, 25 percent is invested in R&D.
Although many Chinese manufacturers are still copying U.S. or European products, they are all too keenly aware that innovation has now become the name of the game.