Brief Overview of Russian Security Systems Market – Part IV

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

Source: Doing Business in Russia: 2012 Country Commercial Guide for U.S. Companies

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:

Source: CORPORATE SECURITY & SAFETY MARKET IN RUSSIA by FinPro

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….

Brief Overview of Russian Security Systems Market – Part III

This is the third 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.

BURGLAR AND FIRE ALARM SYSTEMS

Major end-users: retail and financial institutions, transportation, oil & gas production and industrial facilities, residential property and small to medium businesses

Market volume: In 2011 was approximately $476 million

Projected CAGR: 12-15% 

Remarks: There is a requirement for mandatory government certification. The government has implemented administrative and criminal responsibility for violating fire safety rules, and all buildings shall comply with fire safety requirements. Verticals, such as oil, gas, mining and transportation, have gained increased traction in fire protection systems market, while other verticals such as government, healthcare, manufacturing, academia, and institutional are gearing up.

“Security Systems” publication lists the following:

This market has a great potential in enhanced human machine interface solutions, smart building, seamless intelligent building applications, and wireless sensory networks. Intelligent sensors have networking capabilities, wherein a group of sensors and detectors can communicate easily through control units, leading to more efficiency in the systems. In my previous posts I provided some fire and fire risks statistics in Russia – and the level remains basically the same over the last three years. According market research, new advanced sensors have been developed – that provide accurate data to control units, as well as intelligent sensors that have networking capabilities. Remote users can access these intelligent sensors by connecting through LAN/WAN and Wi-Fi networks. However, for Russia, introduction of new high tech sensors is traditionally complex issue – due to rather awkward existing Government certification system.

One of the most optimistic factor for development of Burglar and Fire Alarm Systems in Russia is the enterprise market. Starting in 2006 the Government ceased the State regulation of Fire Security in Russia. The Government bodies stopped participation in acceptance tests of new sites and installations – the State Fire-Fighting Service was assigned to critical to national security installations. That, in fact, means that most of Russian businesses are responsible for their Fire Protection. Of course, this drastically changes the market and poses new challenges. There is a substantial increase of investments into end-user education both by major players and by medium–sized companies in the market. Almost every week throughout Russia, many training classes and seminars are taking place. This, naturally, to a greater level increases end-user awareness. Industry players and homeowners are ever more interested in integrated solutions. I am planning to have a more detailed post that will discuss industrial fire security, but here I would like to provide this picture of the Russian market, and the way Evrist Group addresses it.

 An interesting development in Russia is in Fire Mapping and Analytics. Some time in the future I will analyze what is going on - there are good descriptions of existing systems in these sources:

• Russian System of Remote Monitoring of Forest Fires
• Monitoring of Fire Environment & Projects of Emergencies

Here I would like to address the reader to a source that provides The Fire Information for Resource Management System (FIRMS) real-time map of fires in Russia:

This Concludes Part III – More to follow….