Monday, October 21, 2013

Brief Overview of Russian Security Systems Market – Part II

This is the second post of the series, where I attempt to make a general overview of the subject Russian market. It is impossible within the Blog to describe market in detail; however, I am trying to make some sketches – as we see it through ERVIST PRISM. Information is derived from open sources, it is cross-referenced; I am also providing some useful links.

Russian Security Systems Market is closely associated with development of country’s economy. It is still in the formation stage – this opens excellent opportunities for vendors and companies providing security solutions. According to experts, every 4-5 years the market demand is drastically adjusted, that leads to implementation of new technologies at a rather slow pace. A great level of fragmentation, semi-transparency, uneven distribution over the regions of Russia, plus substantial presence of foreign vendors – all these are clear marks of undeveloped, still under development market.
According to experts, two major factors facilitate the growth of Russian Security Systems Market:
1. Growth of consumer purchasing power – that leads to development of retail, construction, entertainment and hospitality,
2. Expansion of Government’s investment in transportation, energy production, defense, in development of regions.

On the average, the Russian Security Systems Market grows 15%-20% per annum – this is substantially higher than the growth of other industry sectors: construction (11%); retail (14%), telecommunications and IT (less than 15%).  It is useful to examine the following data that is produced by an authoritative publication “Security Systems”

At the same time, the U.S. Government publication Doing Business in Russia: 2012 Country Commercial Guide for U.S. Companies by Smith Brandon Intl. lists the following “best prospects for sales of U.S. manufactured hardware” in Russia:

  • IP-based solutions in various equipment segments (surveillance, detection, day/night surveillance and infrared systems) especially high end systems
  • Access control systems
  • Fire/intruder alarm systems, especially for public places
  • Integrated control systems
  • Biometric equipment, identifiers and readers
  • Antiterrorist equipment, especially bomb-detection equipment
  • Anti-theft systems, radar detection, recording equipment (wireless)
  • Fire safety equipment
  • Cloud computing used for CCTV/access systems
  • Rescue equipment

It obvious that the U.S. suggestion correlates with the trends of “Security Systems”  Publication.
Let us have closer look at each segment.

VIDEO SURVEILLANCE is one of the fastest growing part of the market.
Major end-users: retail and financial institutions, transportation, oil & gas production and
industrial facilities.
Market volume: In 2011, the Russian CCTV and access systems segments totaled just over $1.4 billion
Projected CAGR: 13% 
Remarks: Imported products and components is the highest – sometimes up to 90%
Major end-users: public organizations, major industrial enterprises, banks, business centers; institutions of culture, education, and medicine.
Projected CAGR: 15-20%
Remarks: Not less than 50% of Russian-made products.

 While the market volume is represented nicely in the this graph:

 This concludes Part II - More to follow...

1 comment:

  1. Nice to read your article! I am looking forward to sharing your adventures and experiences.
    Security Systems