CCTV Camera manufacturers can look forward to a bright future

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Following the 2008 attacks in Mumbai, all sections of society, including the government, businesses and individuals are investing significantly in installing and upgrading their security infrastructure. As a result, the demand for security products is growing faster than the 20-30 per cent growth rate experienced recently.

Although the Indian electronics security industry, which is largely imports based, still has a long way to go to match the standards of the developed world, it is expanding fast and its current value is estimated to be over Rs 20 billion, with CCTV equipment accounting for over one-third of the market. This segment has been growing at a much faster rate than other segments such as access control, intrusion alarms or fire detection alarms.

By Sanjeev Sehgal, managing director, Samriddhi Automations Pvt Ltd (Sparsh)
By Sanjeev Sehgal, managing director, Samriddhi Automations Pvt Ltd (Sparsh)

Tuesday, March 20, 2012: Imports play a major role in the market, but many initiatives are being taken to promote indigenous manufacturing. It is believed that optimum security cannot be achieved with standard solutions. For the best security, customisation is needed, which is why manufacturing plays a major role, enabling companies like Sparsh to provide customised products and solutions. Importers can only provide a few models of cameras, which might prove inadequate in meeting the exact requirements of customers. Alternatively, Indian manufacturers can provide a customised solution to exactly match their customers’ requirements. With CCTV cameras getting more intelligent yet possessing limited retention capabilities, the market offers huge opportunities for software development in CCTV cameras. This has attracted major IT giants towards this segment.

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Forecast for 2012

Currently, the market is driven primarily by demand from the government and the public sector, followed by the industrial and commercial sector. However, we believe that in the coming years, the residential market will outpace other security sectors. We expect the market to continue to grow at over 30 per cent in 2012. The key drivers for this growth would include the increasing concerns about domestic secu­rity, the need for more protection against terrorism, and the emergence of new improved surveil­lance system technologies like IP based CCTV cameras.

The ana­logue technology currently dominates the CCTV camera market, but the demand for IP technology is increasing primarily in the government sector. We expect IP technology adoption to grow significantly as the Internet infrastructure improves throughout the country. There has been a growth in the CCTV camera market due to the adoption of this technology in new sectors such as retail, transportation and healthcare.

Few recommendations

The appreciation of the dollar against the rupee has impacted the growth for this import dependent market. India is a price sensitive market and to increase their market share, most companies have added low end products to their portfolio. The market is also being flooded with low end cheap products from China, by the unorganised sector. This may be contributing to the market’s growth but could hurt it in the long term when these products do not deliver the desired results. Customer education is key to ensure that these low end, low quality products do not impact the market’s growth. The government and various industry associations should work on the standardisation of electronics security equipment.

The industry is hopeful that the new manufacturing policy will boost local manufacturing, and this will reduce the outflow of foreign currency as well as add to employment generation. Local manufacturers should be given preference in government supplies if they can provide the same quality as imported products at reasonable prices. However, despite these drawbacks, it seems a bright future for local manufacturers as customisation is the need of the hour.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine

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