Dahua Launches Aggressive Hikvision Style Sale

By Brian Karas, Published Nov 16, 2016, 02:20pm EST

If you can't beat 'em, join 'em.

This seems to be Dahua's strategy, first mimicking Hikvision in portraying themselves as an American treasure, and now offering deep discounts to encourage sales. 

We have details of their new sales promotion, and analysis of Dahua's move in this report.

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Another *** *** ***

*** ** ******** *** go-to *********** ** *** race-to-the-bottom, **** ********* *** now ***** ********** ***'* reach *** ***** ******** promos, *** *** ********** participating **** ***** *-*** low **** *****-*****. **** is * *****, *** win, *** ***, *** had ********* **** ** "alarm *****" *********** **** a *** ***** ***.

Bad **** *** *** ********

**** **** ** ***** only ******** *** ****-**-***-******, and **** ******** ************ for *** ****** **** regular ********* ** ***. It **** ********* **** Hikvision's *******-********** **** *** *** be ************ ********* **** looking ** ***** ******, ****** price *** ***** ******** factor ** ******* *********.

 

 

Comments (13)

Does Dahua have the kind of backing (i.e. ability to print money) that HIKVision has? Seems a losing strategy if you hop in to a fight that you can't possible stay in for long, it just speeds up the day that HIK runs them out of money

Seems a losing strategy if you hop in to a fight that you can't possible stay in for long, it just speeds up the day that HIK runs them out of money

Matthew, good question / observation. They reported ~$200 million net profits in 2015 off of ~$1.2 billion in revenue.

Right now, they claim ~60 US employees, let's say $15 million annual expense assuming $250,000 per employee (factor in total comp, travel, marketing expenses, etc.).

Assume a fairly bad example that they sell next to nothing this year, Dahua could absorb that $15 million.

So not as big as Hikvision (which is roughly 3x+ greater) but still big enough to do it now.

Of course, as you allude to, at some point, it needs to turn the corner. I think it will be tough for them to get their (unclear / limited differentiation and copying Hikvision market approach but late even if they could fix their poor organization) but they can surely spend some more and cut some prices, at least for the foreseeable future to see if this will work.

Seems a losing strategy if you hop in to a fight that you can't possible stay in for long...

You're assuming they're losing money.

There's no evidence of that in their financials, as of yet anyway.

There's no evidence of that

That Dahua USA is losing money?

Of course, Dahua USA is losing money. The only question is how much. To be specific, by Dahua USA, I mean Dahua USA branded sales, not their legacy OEM business.

Of course, they can reasonably say "Hey we went from ~5 to ~50 people in ~10 months, so obviously we will lose money at first, but then the hockey stick will come". The debate then becomes will they see the hockey stick curve.

Of course, Dahua USA is losing money.

I didn't say that Dahua USA is or isn't losing money. I said Dahua, meaning the parent.

Keep in mind I was responding to Mr. Netardus' statement of:

Does Dahua have that kind of backing, (i.e. ability to print money...)

So the answer is yes, if as a whole Dahua continues to make money, it would be able to continue backing Dahua USA, even if Dahua USA took some time to be profitable.

So the answer is yes, if as a whole Dahua continues to make money, it would be able to continue backing Dahua USA, even if Dahua USA took some time to be profitable.

Agreed, so the two big things are ability to continue to generate China profits and willingness to fund losses for the USA branded sales.

From the recent article regarding Longse, Dahua is selling a 4MP camera for $150-160, while Longse sells it for $40 and is still making at least some profit.

There is a decent chance they're both using the same chips from Ambarella, Hisilicon, TI, etc. Based on this, Dahua's hardware costs are probably very similar to what Longse's are, so there is a quite a bit of extra profit for them. This is of course purely on a hardware level, Dahua would obviously have much higher overhead.

Things that Dahua includes in their price that Longse does not:

  • Shipping to America / foreign country
  • Sales through distribution (ADI etc. get cut)
  • Local sales team
  • Local marketing team
  • Local English based phone support
  • Local field engineers
  • 5 year warranty

Even if you assume the hardware is exactly the same (which I would actually be interested to see proof), they are including much different overall things (i.e., above).

Dahua does include extra in its price. On the other hand, as the equipment gets cheaper and cheaper, the value of some of them is less and less, and can be offset by buying more and more.

Shipping to America / foreign country
Buy more, earlier. Buy for stock.

Sales through distribution (ADI etc. get cut)
Buy more, earlier. Buy for stock.

5 year warranty
Buy extras.

the value of some of them is less and less, and can be offset by buying more and more.

Yes, there is certainly that potential.

Interestingly, though, while Longse is big in DIY, Longse still seems to have very low penetration in the professional dealer space. For example, in our surveys, very few integrators talk of using them.

I'd be very curious to hear of any integrators / installers regularly deploying 100+ Longse cameras a month and how they are doing with that. Anyone doing that or know someone, please share.

Does buying $950 worth of stuff actually cost you more than buying $1000?

From what they posted, yes. Same as $1900 would cost you more than $2000 worth of stuff.

All the more reason to add a few more things to your order, which is most likely exactly what they would want.

If Dahua would concentrate on being their own company instead of trying to 1up Hikvision all the time I believe they could make a well rounded product. They are constantly pumping out products way to early to try and keep up with Hikvision and it shows in the quality and performance of their products.

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