This is the fourth 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.
As I mentioned in my first post of the series, the Russian manufacturers have some good advantages over the foreign ones. The landscape of the Russian security systems market is diversified – traditionally Russian end-users opted for low-cost equipment, but in recent years, the demand is shifting to high-tech solutions that are pricier. As it is everywhere in the world - China, Taiwan, and Korea are the leading suppliers for low-cost hardware. As the requirement for reliability and quality is emerging vendors from Great Britain, Germany, France, Japan, Italy, Israel, Poland, and the United States are in the picture. The following graph shows approximate share of imported hardware.
The biggest foreign players in the market are: Axis Communications, Bosch Security Systems, CBC Group, ComNet Europe, Fujinon, Hikvision, Microdigital Inc, Milestone Systems, Mobotix, Panasonic, Qnap, Samsung, Siemens and Sony.
The government is the main end-user of products and services - over $700 million in 2011. Government agencies and state corporations have almost doubled their expenses: and the share is constantly increasing. The biggest boots are construction for Universiade 2013 in Kazan, Olympic Games, APEC Forum, and Soccer World Cup 2018. As an example, according official sources, the funds allocated for security for the Sochi Olympic Games total $2 billion.
Major Consumers of Safety and Security Products and Services in 2011
At the same time, private entities, mainly in real estate, banking, retail, and oil and gas, are also important buyers and end users of a wide variety of security equipment.
It is a very challenging task to catalog the sellers and distributors in Russia. Some experts claim that are around 300 distribution companies. Catalogue at the authoritative Security Portal www.sec.ru has around 180+ pages with 20 companies on each page. However, many of them are located in the Moscow and St. Petersburg regions. www.brandcenter.ru lists around 2,000 manufacturers of security equipment.
This following, a bit outdated, but still valid, graph shows distribution:
According to Frost & Sullivan, one of the major accelerators of the Russian Security Market is infrastructure growth. “The combined spend on infrastructure totals $626.20 billion and will present security integrators with significant opportunities over the next 15 years.” Experts believe that oil and gas, mass transportation and electricity generation would consume much of security spending. Another challenge for security systems suppliers is the Urban Security (Safe City) development over Russian territory:
- First responder networks (using LTE technology)
- Security of commercial premises
- Security of Government-owned services (hospitals, education facilities, etc.).
Furthermore, in line with the Government policy, there would be substantial requirement for technology and equipment for enhancing of border and maritime security. Upgrade of obsolete physical security with advanced intelligence, surveillance and reconnaissance technologies is planned – that would require a lot of equipment, especially in the field of surveillance and night vision.
This Concludes Part IV – More to follow….