Opportunities In Home Safety, Physical Security Market
Abhijeet Mukherjee, CRN, October 22, 2012, 1500 hrs
According to an industry estimate, the Indian home safety and security market, which includes CCTVs, video phone devices (VDPs), fingerprint locks and intrusion alarm systems is estimated to be around Rs 300 crore in 2012. The industry is expected to grow at a CAGR of 35 percent for the next four years.
As per an IMS report, the residential surveillance deployment market was estimated to be $1.7 million in 2012 and is likely to go up to $7.1 million by 2016 with a CAGR of about 44.8 percent in India.
With crime increasing at an alarming rate, the increase in the demand for home safety and security devices should not come as a surprise.
Companies like Zicom, Dax Networks, Axis Communications, Digisol and D-Link are some of the names which are riding on this bandwagon.
According to reports, India is fast becoming an unsafe place for children with a 24 percent increase in crimes against children in 2011 compared to the previous year. Nearly 33,100 cases were reported in 2011 against 26,694 cases during 2010.
Such an alarming crime rate against children is a big concern for parents; hence they are taking every step to protect the kids. “More and more double income single kid families are going in for IP cameras and other home safety devices. A typical building with 100-odd flats goes in for CCTVs in the kids’ park, corridors and parking areas not only to keep a watch on the overall premises but also to keep an eye on the children,” says Subhashini Ramakrishnan, CTO, Dax Networks.
According to a study by HelpAge India, an organization working for the welfare of senior citizens, Delhiâ€”home to nearly a million senior citizens, crime against elderly people is four times more than in Mumbai and double that of Bengaluru. The study said that of the total cases of crime against elders registered in Delhi last year, the highest form of crime was hurting a senior (42.2 percent) followed by murder and robbery which accounted for 35.5 and 13.3 percent respectively. A major chunk of these crimes happen within the confines of the senior citizen’s home.
Says Sudhindra Holla, Country Manager, Axis Communications, “The changing lifestyle of consumers is another big reason for the increasing demand of CCTVs. Technology is enabling parents to keep an eye on their parents and children over a mobile phone.”
IP cameras allow consumers to see videos using the Internet over a PC or a mobile phone.
Products with increased features are another reason why consumers want to install physical security devices like CCTVs, VDPs and fingerprint locks at home. “Compared to the last three years, security devices now come with added features such as the facility to send an email to mobile devices if a visitor arrives in the absence of the owner. Prices have dropped, but due to the rise in the value of the dollar that advantage has been negated,” says Manoj Khadkikar, Head, Channel Distribution, Zicom.
What a typical security solution at home requires is a 7 inch VDP that comes at an MRP of Rs 9,900, an entry-level DVR that comes for Rs 7,500, and a camera that costs around Rs 2,000. For premium high-tech security a fingerprint lock costs Rs 19,000 in addition to 10 percent of the cost as installation charge.
Analog to IP
A major trend in the home safety and security market is that consumers are moving from analog to IP cameras seeing the advantage of the latter. “The pace is slow because of the cost difference and complexities of an IP environment, but the advantages of IP are many,” adds Ramakrishnan.
An IP camera has advantages such as distinguishing an intrusion, providing alert-based SMSs and recording, and providing more data, but it is 200 percent costlier than an analog camera.
“That is one of the reasons why people still buy analog cameras,” says Akshay Sawant, Director, Siddh Tech, a Mumbai-based distributor. “But people are also gradually understanding that an analog camera can cost more than an IP-based solution due to the power cabling required by analog cameras.”
Wireless finds a place
Instead of wired devices, consumers are now vying for wireless devices. Consumers are opting for wireless connectivity to avoid cluttered wires and have low maintenance. Wireless connectivity is also available beyond home premises in the range of 2-10 km.
“For long-distance wireless needs we provide point-to-point wireless connectivity where we install hardware devices at certain points so that a consumer can watch his office premises or home from as far as 10 km. Since the quality of the Internet cannot be trusted this is becoming a viable option,” informs Manoj Bajaj, CEO, CAS Computers.
“A typical wireless solution comprising three cameras, DVR and HDD can cost around Rs 20,000, but the actual cost depends on what devices and cameras are installed,” adds Sawant.
Devices that can differentiate between an intrusion and a visitor movement, that can send an SMS alert to the owner when intruded, that can differentiate between a family member and a guest, and that record only suspected movements are donning premium residential complexes.
The Mumbai-based Wadhwa Group has installed Zicom multi-apartment VDP systems in its 1,100 premium apartments across India. “There are other companies as well, like the Pune-based Puranik builders, which have installed similar VDP solutions in their projects. The spending on such technology can start at Rs 3 lakh-5 lakh depending on the number of devices attached,” informs Sawant.
A night vision surveillance camera can cover 200 feet in total darkness which makes it much more in demand; add to it the favorable prices.
“Day/night cameras are more in demand because of the lack of major price differences between the two. The price difference is only Rs 500-700 depending on the model. We sell around 400 cameras on an average per quarter, and more than 60 percent of these are day/night cameras,” says Harish Motwani, Director, SB Data, Mumbai-based distributor of Zicom.
Since the home safety and security devices market is in its nascent stage, partners have a lot more opportunities to sell the products. “The penetration of these products has a long way to go and partners can have their hands full because this segment has the potential to grow at least 10 times more than the home networking business,” says Bajaj.
Home security devices provide partners another key avenue to make money. “This is a less treaded path, and partners who have been selling notebooks and home networking products have an option to sell security devices. For example, to their home customers retailers can convince them to install a CCTV at home,” says Khadkikar.
On the profit margin Bajaj says, “One can even make as much as 50 percent profit by selling these devices especially in the metro markets where the trend is spreading like wildfire.”
One of the biggest challenges manufacturers and partners face is that consumers still demand analog cameras to save on costs. “Many times consumers look for cheaper alternatives; they buy analog cameras and expect the features of an IP camera. This lack of awareness is one big hindrance for the growth of IP cameras,” says Holla.
Analog cameras need separate cabling for power, have poor image resolution, and lack video analytics and customized recording.
Lack of awareness, both at the partner and consumer level, is another challenge that manufacturers face. “Both consumers and partners need to be educated about the technicalities and benefits of the products. While partners hesitate to speak much about the products due to lack of knowledge, consumers do not know where to buy these products and who to trust,” comments Khadkikar.
With the growth in technology and the increase in demand, prices are expected to drop, but this is not happening currently. “Since prices are not dropping as per expectations it has become a restricting factor for the devices to penetrate,” notes Bajaj.
According to Anuj Bhall, VP Business Unit Head, SIMS, Wipro Infotech, “This segment is very price sensitive and requires highly qualified 24×7 manpower support for the maintenance of these systems. As the cost of maintenance is high and the segment is very price sensitive, getting the right balance between the price and the offering is a challenge.”
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