DW Races Hikvision To The Bottom

By John Honovich, Published Aug 30, 2016, 08:49am EDT (Info+)

20% across the board price cuts are so last week. Literally.

Days after Hikvision concluded its second 20% across the board price cut in a month, Digital Watchdog has beat Hikvision with a 25% one.

In this note, we examine what DW is doing, what this signals for them and the broader market as the race to the bottom accelerates.

DW ***** vs ********* *****

**** ** **'* ***** ***** ******* end ** ****** ****:

** **********, **** ** *********'* **** last ****:

*** ********* ** ******* *******, ***** day ***** *** ***** ***** ** discounts *** ** ** **** ********** as **** **** ** ******* ****** for * ******** (******** **** ** least **%), *** ******* *** ******* savings ** ***** ($*,*** ** $*,***) and *** *** ******* ** ****** (25% ** **%).

** **** **** **** **** ** designed ** ** ** *** ** month ******* **** ******** ******* *** integrators. **** *** ********* ****.

Dangers ** ****

*******, ***** ** (*** *********) *** be ******* *********** ** *** ***** term, *** *** **** ** **** a **** ** ************ ********* *** DW *** *** ***** ******* *** owned ** * **********. **, **** most *********** *********, ***** ** **** profits ** **** ** ********. ******** prices ** **% ** * **** cut ** ***** ******* *** ******** manufacturers. **** * ***** ******** **** likely ** **** **** ******** **** **** but **** ** ** *** * subsequent **** ** * ********* ********* to ******** ****-***** ** **** ** revenue.

********* ******** **** ****. *** **** smaller ************* *** ** ***** ***** Hikvision, *** **** ****** **** *** to ********** ** *** ** ********. Hikvision *** ****** ** **** ***** in ***** ******* ($* ******* *******, Chinese ********** *********, **** ********* ** domestic ******, ***.). *** ******* ************* cannot.

** *** ***** ****, ** ** hard ** ***** ** ** *** other ******* ************ **** **********. ** is ****** * **** **** **** strategy *** ** *** ** * necessary *** **** ********* ** ******** 100+ salesman ** *** ***** ******** **** ************* price **** **** **** ********* **** every ************'* ********.

*** *** ***** ** ***** ** ***** do ** ***** **** ********. ****** **** *** (******* *****) ****** well **************** ***** *** ****** *** ******* *** ******* (but **** **** **** ** ****) ** ** ***** ** *** left ****** ** ******** **** ********* ** the ******, ** *** ******.

Comments (9)

Undisclosed #1

IPVMU Certified | 08/30/16 02:25pm

Are they really a manufacturer, or essentially a Dahua/NetOp OEM?

I know the ISD cameras are their 'own', (or were their own), but maybe some of the risk is underwritten by Dahua here for their cheapest product?

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John Honovich

IPVM | In reply to Undisclosed #1 | 08/30/16 02:27pm

To the best of my understanding, they are a Korean / American hybrid company and use Korean manufacturing.

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Patrick Kelly

In reply to Undisclosed #1 | 08/30/16 03:58pm

We have no relationship with Dahua.

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Undisclosed #1

IPVMU Certified | In reply to Patrick Kelly | 08/30/16 04:22pm

Apologies, Patrick.

For the record then you are not an OEMer of someone else's cameras?

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Undisclosed Distributor #2

08/31/16 01:33am

Is it true Hikvision dictates the pricing cuts/discounts for distributors?

I still firmly believe these price cuts are a very smart strategy by Hikvision to drive profits away from grey importers.

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John Honovich

IPVM | In reply to Undisclosed Distributor #2 | 08/31/16 01:41am

Is it true Hikvision dictates the pricing cuts/discounts for distributors?

Hikvision authorizes / sets the discounts for distributors. If that is what you mean by 'dictates' then yes.

these price cuts are a very smart strategy by Hikvision to drive profits away from grey importers.

Why? They are going to cut prices for any product and any customer to combat grey market imports of their Chinese version products. Are there no more efficient ways to go about this?

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Larry Tracy

08/31/16 05:56pm

You can set prices for distributors all day long but they will find a way to squeeze it up unless you register with them or the vendor to get it back to a reasonable level. They do this to every vendor, except maybe the ADI/Honeywell relationship.

Monthly specials are different, those I am sure are agreed in advance at set levels.

The war will continue until your down to a few video vendors just like motions sensors and control panels. Look back at the intrusion business history.

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John Honovich

IPVM | In reply to Larry Tracy | 08/31/16 06:06pm

The war will continue until your down to a few video vendors just like motions sensors and control panels. Look back at the intrusion business history.

That is the Hikvision justification for what they are doing here.

Please make a stronger case for your analogy. Just because you say it is, does not make it so.

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Brian Karas

IPVM | 09/02/16 04:06pm

Looks like Videofied is trying a slightly more cautious approach, 15% off your first purchase. This is at least a little more sustainable, get people to try the product, then hope they buy more at regular price.

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