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The Chinese civilian security market is showing promising growth, with predictions that urban households will purchase approximately 50 million security system units over the next five years. At an average cost of 1,000 yuan per unit, this could translate to a market value of 50 billion yuan, or about 10 billion yuan annually. Smaller businesses, supermarkets, and other institutions are also contributing to the rising demand for security solutions.
Despite the potential, some experts suggest that China's security market is still in its early stages, driven primarily by government initiatives and industry trends. The term "civilian market" is often used to describe a sector that has yet to fully take off. However, with the nationwide push for "Safe Cities" and smart city development, the civilian security market is gradually opening up. That said, the initial phase is not without challenges—many companies have faced difficulties in promoting their products to the general public.
If "Safe City" projects marked a turning point for the security industry, then "Smart Home" solutions are now seen as the key to unlocking the civilian market. Deng Wenjie, executive vice president of the Shenzhen Security and Prevention Industry Association, highlights that although the security sector has been around for decades, the civilian market holds the greatest potential, and it's only just beginning to develop. Similarly, Jiang Haiqing from Hikvision notes that current security products for civilian use are still in the early stages of development, but their future applications are vast.
This year, major players like Hikvision (002415.SZ) and Dahua (002236.SZ) have started expanding into the civilian market, signaling a shift in strategy. Some smaller companies have already targeted this segment for over two years. According to data from the Institute of Advanced Industrial Science and Technology (GGII), the global smart home market was valued at around $42 billion in 2009, growing at a rate of 20%–30% annually. By 2015, it was expected to reach 124 billion yuan. Advances in technologies such as the Internet of Things, cloud computing, IPv6, and ZigBee have further accelerated smart home development.
In 2012, the civilian security market grew by 20%, which significantly boosted the deployment of security companies. Deng Wenjie predicted a 30% growth rate in 2013, with explosive growth expected by 2014 as smart home adoption increases. Chen Zongnian, chairman of Hikvision, believes that both governments and individuals are becoming more aware of the importance of safety, creating new opportunities for companies to grow.
Hikvision has recently launched consumer-oriented security products and emphasized service-based business models in 2013, focusing on small businesses and families. The expansion into the civilian market is not limited to first-tier cities; residential communities there are currently the largest application areas. As the market grows, security companies are moving into second- and third-tier cities, with even some rural areas beginning to adopt surveillance systems.
While the civilian security market represents a huge opportunity, it also presents unique challenges. Unlike the commercial sector, which tends to be more straightforward, the civilian market has its own set of expectations. Users may focus on details like price, ease of use, and design, which can be overlooked by manufacturers. Companies must adapt their strategies, ensuring that products are user-friendly, visually appealing, secure, and supported by reliable maintenance services.
To successfully enter the civilian market, companies need to rethink product development and marketing. They should focus on household users, keep costs reasonable, simplify operations, and ensure data protection. These steps are crucial to building long-term trust and loyalty among consumers.
Although the civilian security market may not see the same large-scale purchases as government contracts, it is a growing battlefield for security companies. With careful planning and attention to user needs, the market has the potential to become a major driver of growth in the coming years.