In these series of posts, I would attempt to make a general overview of the subject Russian market. It is impossible within the Blog to describe market in detail; however, I will try to make some sketches – as we see it through ERVIST PRISM. Information is derived from open sources, it is cross-referenced; I will also provide some useful links.
It acknowledged by all analysts that the Russian security systems market has substantial potential for development. This is natural, as the country’s infrastructure is expanding, and the level of various threats in recent years increases. The market is fragmented, not transparent, and every expert judges it by own criteria, so any task to assess it is rather laborious. Indeed, some experts estimate its scope within $6 to $10 billion; while other speak about 15 billion Euros. Anyways, it would be true to state that the world-renown ratio of 70% of services and 30% for hardware may be actual.
To get a feeling of the Russian scope – I would like to provide the following statistics data that shows the number of currents assets (not military) that are protected by two biggest entities in Russia:
Source: Ministry of Interior - MVD
According to available data, in 2005 the Russian security systems market was 0.14% of country’s GDP, in 2008 – 0.15%. The market is highly fragmented with a mix of national and international entities. In 2011-2012 the market experienced steady growth rate of 10-12%. No companies with 100% foreign capital are allowed to provide safety and security services. There are many products of foreign vendors on Russian market. Nevertheless, domestic production is growing on: Russian manufacturers provide quality hardware with excellent cost-effectiveness factor. According to experts, video surveillance equipment is not as good as imported, but Russian burglar and fire alarms sensors, intellectual video monitoring solutions; perimeter control products are fairly good. Other advantages are:
- CCTV and Video Surveillance
- Access Systems
- Burglar and Fire Alarm Systems
- Perimeter Security and Control Systems
In the following slide, I made a comparison of characteristics of the market from three different sources:
- A.A. Antonenko, T.A. Butcinskaya, V.Yu. Fedorov. STATE OF SECURITY INDUSTRY IN MODERN RUSSIA by authoritative Russian experts
- CORPORATE SECURITY & SAFETY MARKET IN RUSSIA by FinPro, May 2010
- SIA Russia Security Market Report. Executive Summary
When planning development of business in the country it is crucial to determine geographical parameters of the market. Once again, I suggest looking and comparing the data from two different sources:
Source: S.N. Nekhocheninov Evaluation Of Fire Risks In The Federal Districts Of Russia In 2007-2010 Years
It is interesting to note general correlation of data in all three sources.
This Concludes Part I – More to follow….