Dahua Distributor Bad Breakup

By: Brian Karas, Published on Mar 27, 2017

A Dahua distributor in Europe claims that Dahua took over his top customers, revoked his distributorship status, and left him with a large amount of essentially unsellable inventory.

The distributor provided IPVM with details and documents to back up his claim. Dahua was given more than a month but has not responded on this issue.

In this report we outline the events the distributor described to us.

Videosec **********

**** ****, *** *********** ********, is ***** ** ******* and ********* ****** *** eastern ******** ******. **** were *** ***** ********** Dahua *********** ** ******, and **** **** **** $6M *** ** ******** with ***** ***** ****** the **** ** ****. Dahua *** *** *** only ****** **** ******** distributed ****** **** ****, but ** *** *** of ***** ******* ******* lines.

Claim * - ***** ***** *** *********

**** **** ****** **** Dahua ***** ******* ******** with ***** *** * dealer *********, *********** ** arrangement ** **** ***** products ** **** ********, without ********* **** ****. Dahua ******* ***** ********* direct ***** ** ****** that **** ** ********** for **** **** ** be ***********. ***** ********* represented * *********** ******* of **** ****'* ******** in *** ******, *** losing **** ******** *** damaging ** **** ****'* business.

*******, **** **** **** that ***** **** ****** them ** **** ****** with ***** ********* ******* after **** **** ******* additional *******, ***** *** forecast *** ***** ** these *********.

**** **** **** * letter ** ***** ***** distributors ** *** **, outlining ***** ******:

Claim * - ***** ******* *********** *************

********* ** **** ****, their ************ ********* **** Dahua *** ******** ********, and ******* *******. ***** also ********* ** ******* media *******, **** *************, ** ****** **** site ** *******, ****** them ** ****** ********** to **** **** ***** an ********** ***** ***********:

Claim * - ***** ******* ** ******* *** $**, ******* *******, ******** ** ******

** ******** ****, ***** asked **** **** ** help **** ***** *** a ***** ***** ** product, ******** *** ****** for * ********** ****** of *******, ********* **** $12 *** *** ** cameras. ********* ** **** Tech, ***** ****** **** to **** ***** ***-****** products, *** ***** **** below ******** ***** ** their ****** ** **** move *** *********.

**** **** **** ***** requests **** ***** **** illegal, *** ***** **** their ******** *** *** overall **** ****** ** their ******. ** ******* from **** ****'* ***** explaining **** ** *****:

******* ** ***** *****'* requests ** **** **** this ***** ** **** Euro **** ******** *** to ***** ******** ** work **** **** ****'* customers ******** *** ****** their ************ *********.

Claim * - **** **** ********** *********

**** **** ********* **** had $** *** ** product ** **** **** their ************ ********* *** canceled, *** *********** ** way ** **** **** product **********. **** ***** Dahua ** **** **** them ** **** **** product ** *****'* *** distributors ** *** ******:

*******, **** **** **** that ***** *** ********* to ****** ****.

*** ********* ***** *** sent ** ***** **** Euro ****, ********** ********** concerns **** ***** ***** with *** *********:

Euro **** $***,*** ****

** ** ***** ** us, **** **** ******** that **** ********** *** to *** **** *** leftover ******* ***** ***** costs, *** **** ~$***,*** in ***** **:

Dahua's *********

** ** ***** ** Euro **** ***** ***** notified **** **** **** would ** ****** ** a ***********, ***** **** they ******* ** "****** marketing **********", ***** *** based ** **** ** evaluating ****** ********, ****** structure, *** *****/******* *********. Dahua's ***** **** **** felt ***** ******* **** not ********** ** *******.

**** **** ********* * copy ** **** ***** to **:

***** **** *** **** to ******* *** ************, and ******** **** **** that **** ***** *** purchase ******** **** *** of ***** *** ************, instead ** ****** **** Dahua.

Euro **** **** ***** ************ ************

**** **** ***** **** Dahua's ***** ********** *** unreasonable ****** ************ *** the ******, ***** *** to *** ********* ** Dahua ** ****** ***** distribution ******** ** *******.

** **** **** **** did $*.** **** *****, and **** **** **** to $*.** ** ****. For **** ***** *** a **** ** $*.** for **** ****, ***** they **** *** ************ in ***** ** ********** competition **** *********, *** overall ******** ***** ** pricing. ***** **** ***** with ***** **** ** $2M. **** **** **** they ********* ** ***** to ******** *** ****** of ********** *******, ** give **** * ****** market ** **** **, but ******* ***** **** their ******* ******* ****** distributors.

*****'* ****** ************ **** unreasonable, ********* ** **** Tech, *** ** ***** not ********* ******** **** were *********** ****** ******* alternatives ** **** *** sales *****.

No ******** **** *****

** ***** ***** *** comment ** ***** ******** 2017 **** ** ***** began ************* ****, ** any ********** *********** **** would ******* **** ******* into *** ******* *********** this ******, *** **** not ******** * ********.

Dahua ********

**** **** **** **** are "*** ** *** sorry" **** ***** ************ with ***** *****, *** that **** **** ***** on ** ***** ******** from *******, ******, *** others ** ******* *** Dahua ******** ** ***** catalog.

Comments (35)

Sean Nelson

Nelly's Security
03/27/17 01:46pm

This is indicative of many other horror stories I have heard as well that happened in the USA with OEM distributors doing business with Dahua, I do hope that some distributors share their stories on here to raise awareness to other distributors considering doing business with Dahua.

I actually feel Dahua is hampered by their bad business practices. Its a company that has a lot of great potential but a few silly business practices prevent them from making great progress. I would like to see an official response from Dahua on this matter of how they treated this distributor.

Its stories like this though that prevent me from wanting to order several months of inventory from any Chinese company for that matter, not just Dahua.

John Honovich

IPVM | In reply to Sean Nelson | 03/27/17 02:11pm

There are hundreds of companies who are eager to distribute or relabel Chinese products but there are 2 big suppliers who dominate - Dahua and Hikvision. This means those companies know they have competitive power here.

Sean Nelson

Nelly's Security
In reply to John Honovich | 03/27/17 02:19pm

If Im being completely honest, Im not sure why Dahua or Hik just doesnt go to a
"direct to integrator" sales model. Perhaps that is where they are headed but are just gradually beefing up their support staff to make this feasible. IMO, if executed properly, this would offer the most profitable option for them. So I cant say that I disagree with what they are doing or the path they are heading.

What I do disagree with is how they are doing it. Alot of these distributors were part of Dahua's growth, the least you can do for these disty's is give them a years warning of what your plans are. They wont like it but atleast they have time to make arrangements to dump their inventory and find a new supplier.

Undisclosed #1

03/27/17 02:22pm

I'm curious why Dahua was trying to 'shift' product from Amsterdam to Hungary at fire sale prices? Were they engaged in channel stuffing within their EU region but across international borders?

It's hard to take Dahua's 'market strategy shift for 2016' response seriously when their own EU GM requested that Euro Tech 'help them' (Dahua) by taking 3-5K pieces at the end of November 2015.

I don't know the EU trade regulations, but why hasn't Euro Tech sued Dahua for their losses (plus punitive damages)?

Undisclosed Distributor #2

03/27/17 02:24pm

I don't think that providing distribution buy prices in this article is fair to other distributors of the product in both the EU and other countries.

* I don't use or sell Dahua BTW.

John Honovich

IPVM | In reply to Undisclosed Distributor #2 | 03/27/17 02:29pm

I don't think that providing distribution buy prices in this article is fair to other distributors of the product in both the EU and other countries.

#2, thanks for the feedback.

The reason it is included is that it is core to the distributors contention that he lost money and that Dahua is doing something wrong.

As you know, we rarely mention distributor pricing and our aim is to inform readers in context of a trend or issue, not to 'shout' such pricing to the public.

Undisclosed Distributor #8

03/27/17 02:37pm

Hi everyone. This strategy of Dahua had been announced to us a few weeks ago on an official meeting of the Greek distributors.

They dare to ask from all of us to give them information of all the big system integrators of Greece, in order to provide them direct pricelist. Since we all refused to help them on this we was told that they will do it no matter if we help them or not!

What they declare is that they are doing this in order to make integrators feel more comfortable with the product and the brand but the products will still be sold to them through the distribution channel.

All the past actions of Dahua in our market but in other markets also, prove that what they say is not true and reliable.

It seems that this good and potential company, is looking at the tree and not the forest behind it.

Undisclosed Integrator #3

03/27/17 04:05pm

This is very simple what Dahua is doing. Hikvision is a goverment company and in eastern europe the prices are already at the bottom. Dahua made a decision to take out this company from the market and keep the margin to themselfs. They replaced with more companies and pushing them to reach the sales limit. "Controll the market". Dahua cannot compatite with Hikvison prices so every cent is very important to them. Especially in the eastern european region. The most important Dahua sentence: "We need to grow"...

Rich Moore

In reply to Undisclosed Integrator #3 | 03/27/17 04:28pm

#3 and this is why Dahua will always be chasing Hikvision. Instead of trying to set themselves apart from the competition, they are always chasing them. Reminds me of a book called the Blue Ocean Strategy.

John Honovich

IPVM | In reply to Rich Moore | 03/27/17 04:31pm

Instead of trying to set themselves apart from the competition, they are always chasing them

In fairness, what else can Dahua do? I mean this seriously. I am genuinely not sure of a viable strategy for Dahua that does not consist of mimicking Hikvision and praying it all works out. Thoughts?

Rich Moore

In reply to John Honovich | 03/27/17 04:39pm

If I was advising Dahua, I would offer to have them expand into a higher end products. Honda has their own line but they also offer another brand called Acura which is a higher end model. Pricing is what is flooding the market right now but why not try to capture the high end surveillance projects? Become a leader for securing recorders instead of leaving Telnet on, work with FLIR on higher end thermal cameras since they are already using their recorders, and rebrand themselves as a product you can trust. This isn't a road map, but you did ask for thoughts.

John Honovich

IPVM | In reply to Rich Moore | 03/27/17 04:48pm

If I was advising Dahua, I would offer to have them expand into a higher end products.

Hikvision is already doing that - Hikvision Enterprise Expansion ASIS 2016 Review so that too would be mimicking them.

Undisclosed Integrator #3

In reply to John Honovich | 03/27/17 05:03pm

Dear John,

Can you please write it down what Hikvision have and Dahua not from hardware?

Dahua is following Hikvision product line.

I agree that Hikvison have VMS soft what Dahua dont have.

With this movement every VMS/PSIM company was angry to Hikvision, because they are destroying the VMS/PSIM market.

Maybe I missed something what I dont know...

Thanks

Rich Moore

In reply to John Honovich | 03/27/17 06:18pm

They don't have to offer the same exact cameras and features. Go into what Hikvision is not currently in.

Brian Karas

IPVM | In reply to Rich Moore | 03/27/17 06:26pm

What is Hikvision not currently doing/offering products in that is a large enough market for a company the size of Dahua?

Also, I think it is difficult in general for a Chinese company to position themselves as any kind of 'high end' product. This is particularly true in North America, which is a significant market in terms of spending on security/surveillance.

Finding a path that Hikvision is ignoring would be a good idea, but I am not sure what that would be.

Undisclosed Manufacturer #5

In reply to Brian Karas | 03/28/17 03:00pm

Does Hik have a body wearable?

Ethan Ace

IPVM | In reply to Undisclosed Manufacturer #5 | 03/28/17 03:32pm

Of course they do.

Sean Nelson

Nelly's Security
In reply to Rich Moore | 03/27/17 06:30pm

Either that or look at what Hikvision does, and do it better. For example,

-make Dahua equipment the most secure equipment on the planet.

- Make the best p2p interface on the planet, fully featured!

- keep making inexpensive products, but make them with hardware features that people want; (get rid of the pigtail!)

Rich Moore

In reply to Sean Nelson | 03/27/17 06:34pm

There is a void. IPVM recently had articles on projects Hikvision has lost because of their lack of security/hacking, such as losing their Schedule C? (Don't quote me, I'm doing this from memory), as well as the township in Michigan that is removing all Hikvision products. I think Sean is on to something. Be the absolute leader in security. Become a trusted name in the industry, unlike the Chinese government owned Hikvision.

Undisclosed Integrator #3

In reply to John Honovich | 03/27/17 04:40pm

Maybe they should try to start a costumer orinted support and not just looking the prices... These are a technical security products and need a lot of good support from the company from people who are skilled and not a junior technical support persons who dont know nothing. But junior technicians are cheaper... For longer period it is better to have good service and not just looking for the prices. There is long time business relationship and short time. I think it is better a long time relationship. The market is limited...You cannot sell the IP camera directly to my grandmother...

Robert Shih

Independent
In reply to John Honovich | 03/27/17 08:23pm

Focus on raw spec hardware superiority, open up software development for community based open source and fund/support the initiatives and prioritize the most important features to improve the platform.
Focus on cost effective LPR solutions (and other analytics) that easily integrates with their existing equipment.
Stop taking away features from their previous generations.
Stop dropping support for older equipment
Focus on improved third party support for access control options and integration with their CMS solution. That and get their CMS ready for prime time, dammit.
OVERHAUL their Video Wall Solutions.
Focus on their OEM distribution channels and treat them with respect.
Stop competing with their own OEMs and stealing their business!

There are a litany of actions that Dahua can take to improve their prospects; they just need to actually listen.

Undisclosed #1

In reply to Robert Shih | 03/27/17 08:26pm

How much of the 'refusal to listen' is cultural nuance vs general ineptitude?

Undisclosed Integrator #3

03/27/17 07:18pm

People, you are getting from users "Disagree" subscribes....

Undisclosed Distributor #4

03/28/17 04:48am

HIKVISION is doing much worse than this. Four distributors of HIKVISION where two were exclusive is going legal against HIKVISION in Middle East for the same reasons and for selling end of life to distributors. Furthermore they are sending direct pricing to the top customers of these distributors and asking to handle these accounts direct.

It seems this is the Chinese way of doing unethical business and causes damages for distributors after buying big huge stocks that ends laying in their warehouses.

Rich Moore

In reply to Undisclosed Distributor #4 | 03/28/17 11:31am

I wouldn't say that this is the Chinese way of doing business. The company I work for is a direct wholesaler for one of them not mentioned in the comments. We've worked with them for 2 years with no problems. That's not to say it won't change eventually. But maybe that's how business is done in China...ride the wave until it is no longer profitable.

Corbin Hambrick

In reply to Undisclosed Distributor #4 | 03/28/17 02:36pm

OH NOOOO WAAAY!!! HIKVision is the best!!! What are you TALKING about???? You're just a Chinese company hater!

Sorry haven't had my coffee yet this morning.

Arthur Huijskens

03/28/17 10:50am

The beginning of the end. The CN culture is so far apart from our European way of doing business. And believe me if I say that Dahua is not the only one going direct to the end customer. Distributors where nice to get their customer base. When not needed anymore and demand is created the just will go direct.

And the distributor? Well in short..... thanks, sorry, I did not know, you loose your customers.

Corbin Hambrick

03/28/17 02:23pm

Be careful IPVM you'll be considered "haters" by integrators who are in love with Dahua products

Corbin Hambrick

03/28/17 02:25pm

Seriously though you guys are obviously important enough in the market for these guys to share the details with you...I'm assuming in hopes to notify the security community about bad business practices and offer a warning to all those who deal with Dahua.

How nice that they have a place to "rant" and we have a place to get "insider" information.

John Honovich

IPVM | In reply to Corbin Hambrick | 03/28/17 02:32pm

Seriously though you guys are obviously important enough in the market for these guys to share the details with you

Well, Dahua would not confirm that telnet was open during the Mirai botnet attacks and that was obviously already known so I doubt they are going to comment on something as sensitive as this. This is the Dahua way.

We'd be happy to talk to them and sometimes they do talk to us but not on something like this.

Undisclosed #1

In reply to John Honovich | 03/28/17 02:38pm

Since they like to play follow the leader, perhaps they should hire themselves a Crisis Communications Writer

Corbin Hambrick

In reply to John Honovich | 03/28/17 09:03pm

What I mean is for the distributor to offer details to you about their grievance with Dahua. Great that they have a loud voice through you.

Undisclosed Manufacturer #6

03/28/17 05:11pm

Sounds like there's more to the story. Hungary is the wild west of EMEA. The way American and Japanese companies do this is by calling big deals "house accounts" or corporate accounts. Same thing happens - they take the money.

Sounds like Dahua learned from the best.

P.S.: There's nothing wrong with Chinese people, right?

Undisclosed Manufacturer #7

03/28/17 05:42pm

It is a very selfish company, they only think them self and will kill all their distributor partner‘s business first with very bad and despicable business practice when they think there is not enough profit. Think it carefully is this company right choice for your business？

Mick Brown

04/03/17 09:57am

Yes I first hand saw hikvision trick dahua into this path at ifsec

polo Cai had a conversation on the dahua

booth with mr fu ceo of dahua

pointing at me saying they don't need western companies and collectively hik and dahua should sell brand and dominate the security industry for china

Hik we're very concerned that dahua would dominate high definition analogue with Cvi

it was hike intrest to get dahua to go to war with its own customer base

as they were about to launch cvi

i guess this cost dahua 10 billion

matket gap

no fool like an old fool

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