ELECTRONIC SECURITY SYSTEMS IN INDIA JUNE A report by IndiQuest Research Servic All Right Reserved, 20
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1 ELECTRONIC SECURITY SYSTEMS IN INDIA JUNE 2007 A report by IndiQuest Research Servic All Right Reserved, 20
2 Executive Summary Electronic security pertains to leveraging technology in safeguarding assets by preventing unauthorised access to key data or assets. The government has been the traditional consumer of such security services. Corporations rank second in the usage of such devices for their employees and critical data infrastructure and now one can witness its implementation in areas like household security and small mom-and-pop stores. Of the many products that one sees in the industry, alarms, access controls and close-circuit televisions (CCTVs) broadly make up the electronic security industry and are popularly and extensively used. CCTVs have gained more importance in the UK and US as governments and domestic intelligence forces now make large scale implementation of them at public places. Access controls continue to be used for a larger part by governments and corporations, though its usage in the residential sector is yet to see any significant acceptance, alarms being more popular there. The electronic security market has been traditionally dominated by US and Europe an understandably so as it has witnessed loss in property as well as lives as it continues to be the popular target of militants and extremist movement. Besides being an economic superpower, the countries in those regions have continued to innovate and produce technological superior products in order to minimise the occurrences of such incidents. The demand for electronic security services in the US and Western Europe is expected to touch US$50 billion and is expected to account for over 70 percent of the global demand. However, the market in such countries have started to approach maturity as growth touches single digit figures as compared to double digit figures in other developing regions of the world. India s niche electronic security systems market is on the verge of generating a windfall of revenues for the players in this industry. Electronic security products have been traditionally used by companies, more specifically private companies, post-liberalisation as they continue to maintain international standards to match up to and acquire more clients. However, factors such as political, socio-economic and liberalisation of the Indian economy will contribute towards the industry clocking double digit growth as compared to the growth of such equipments from developed countries.
3 The market for electronic security products in India is largely unorganised and is flooded with cheaper products from countries like Taiwan, China and other countries in the South-East Asia belt. These products score in terms of the price advantage which established players find hard to compete with, given India s characteristic price-sensitivity attribute. Additionally, the awareness among consumers in India with respect to the products available and more importantly the necessity of using such products have been responsible in lower acceptance of such security products in India. What makes this industry, in the Indian context, even more challenging is the fact that none of the players are able to come to a consensus on the value of the industry and the expected growth potential. Moreover, the industry characterised by the presence of a few players and the potential to accommodate a few more, is in the lower end of the growth curve and has a few more years for it to peak. The report attempts at understanding the Indian market for electronic security products and gives an indication to the segments that need to be addressed. Additionally, the report also throws light on the industry characteristics in terms of regional usage, end-user classification and device market share. The outcome of the report has thrown up the following important points: The market for electronic security equipments in India is expected to grow at 25 to 30 percent for the next five to ten years Organised players comprise only 20 percent of the market but account for 80 percent of the revenues generated India will graduate to using higher-end security products as compared to other countries were the market witnessed the evolution in the usage of different products The residential and educational sectors have been largely untapped and will help in boosting growth in the electronic security industry The country s southern region ranks first in the usage of security products followed by the western, northern and eastern parts of the country Security equipments in India have been largely imported though there are signs of foreign companies setting-up manufacturing bases here Current taxation policies have yet to encourage domestic player from competing with international companies In conclusion, the market for electronic security equipments in India is largely untapped and under-served. Additionally, the consumers in the country need to be awakened to its importance which will prove to be a daunting task for players operating in that segment. Mixed with the price
4 sensitivity of Indian consumers, India will be a challenging market for companies to operate in. However, the market holds immense potential for those players that are able to find the right mix of price, technology and awareness, the synergies of which will pay rich dividends for a company s investments in the electronic security industry in India. To order a copy of the full report, please contact indiquest.services@indiquest.co.uk
5 Table of Contents EXECUTIVE SUMMARY 1. INTRODUCTION 2. COMPONENTS OF THE SECURITY SERVICES INDUSTRY - MANNED SECURITY - UN-MANNED SECURITY SURVEILLANCE SYSTEMS ACCESS CONTROL DEVICES ALARMS 3. GLOBAL SECURITY MARKET OVERVIEW - SHARE IN DEMAND FOR ELECTRONIC SECURITY DEVIC ES - HISTORIC AND FORECAST DEMAND AND REVENUE FIGURES FOR ELECTRONIC SECURITY DEVICES 4. ELECTRONIC SECURITY PRODUCTS IN INDIA 4.1 MARKET SHARE OF PRODUCTS 4.2 SUPPLIERS OF ELECTRONIC SECURITY EQUIPMENT INDUSTRY 4.3 REGIONAL USAGE OF SECURITY PRODUCTS 4.4 END-USER PATTERN FOR ELECTRONIC SECURITY DEVICES 5 FACTORS INFLUENCING GROWTH 6 APPENDIX 6.1 PROFILES OF COMPANIES OFFERING SECURITY SYSTEMS IN INDIA
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