Hikvision Aims For #1 Brand In 2020

Author: John Honovich, Published on Apr 03, 2017

Hikvision's Chairman and Communist Party Secretary told Xi Jingping his gift for the Communist Party's 100th anniversary in 2020 will be to make Hikvision the industry's #1 brand.

In this note, we examine the statement, Hikvision's current position and the likelihood of achieving that aim.

Aim #1 Brand

Hikvision Chairman Chen Zongnian is the head of Hikvision and Hikvision's government run parent company (CET HIK). He is also the superior of Yangzhong Hu, who is Hikvision's public face to the West.

Hikvision Chairman Chen declared:

Hikvision seeking international status. China's high-tech enterprises in the international status is not much. Haikang after years of effort, it should be said to reach a certain stage. Performance in several places: First, our three major mainstream products in the global market share is the first; second consecutive years in the United States high-speed growth; Third, our key projects in the United States firm foot. At the end of last year, with our system, with our products, with our brand won the US Department of Homeland Security Gold Award, although not in our name award, but the product is our system is our, and play or our brand The With these support, Hikvision brand has entered the security industry's first global phalanx. I also told the General Secretary [Xi Jinping] of the proposed, hope in 2020, Hikvision brand into the industry's first brand, to the party's 100th anniversary gift. [Emphasis Added IPVM]

Chairman Chen also confirmed Hikvision was Chinese government owned, during Xi Jinping's visit to Hikvision.

Poll / Vote

Current Revenue vs Brand Status

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Hikvision is clearly #1 overall in revenue but their brand still lags significantly outside of China.

For revenue, Hikvision is approaching $5 billion, which is huge for the video surveillance market (compare to Axis the #1 non-Chinese manufacturer with less than $1 billion). However, the overwhelming majority of Hikvision's revenue is from inside the China market helped by them being owned by the government, Chinese's protection policies and the record infrastructure spending over the past 5 - 10 years. Even outside of China, roughly half of Hikvision's international revenue comes from non-branded sales / their OEM partners.

On the international brand side, Hikvision has challenges. One simple one is that Hikvision still predominantly sells to smaller dealers and smaller projects and with significant price discounting, things that do not help in establishing a premium brand. The bigger issues for Hikvision internationally is the China government ownership and their cybersecurity challenges.

A comparison of Axis and Hikvision integrator favorability shows the challenges (from the 2017 manufacturer favorability rankings):

Axis was the overall #1, Hikvision came in 14th out of 20 manufacturers, only beating Dahua, Lenel, OnSSI, Pelco and Arecont, all companies having serious problems of their own.

Why #1 Brand?

The Chinese government desires 'soft power' and 'international status' as Hikvision's Chairman statement above indicates. Selling a lot of 'widgets' by itself does not deliver such status. Think of the prestige of Japan's Panasonic and Sony brands or South Korea's Samsung. The Chinese government is not simply interested in profits like typical Western corporations think. As a government owned company, Hikvision is especially cognizant of achieving the government's greater goals.

Challenges To 2020

It will be hard for Hikvision to come close to being the industry's #1 brand in 2020, simply because they have so much ground to cover and have significant brand damaging issues to deal with. It is ironic and would be especially painful for Hikvision's Chairman to admit to Xi Jinping that one of those issues is Hikvision being owned by the Chinese government.

3 reports cite this report:

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Comments (17)

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I voted no but only because 2020 is too optimistic. 2025 though? I can see that happening.

2025 though? I can see that happening.

By 2025, if not 2020, China will have a major economic downturn / event because of the unsustainable increase in debt to artificially prop up short term economic growth.

When that happens, Hikvision will be more concerned with not losing what they have, rather than taking over the international market.

Why does this feel like a game of economic chicken - just waiting to see who flinches or bails first?

I'm hoping Chen Zongnian commitment will result in Hikvision user manuals that actually relate to the current firmware in their products and make the end user experience consistent with his goal.

when I read this headline, I assumed they meant the biggest brand in all industries. Like apple or Google, which, yeah that would be real hard to achieve.

As far as biggest brand in surveillance industry? They arent far off. That is somewhat of an immeasurable statistic to reach, but everyone knows about Hikvision already, and they are by far the #1 sales-wise company in the industry. I assume they mean they want to be the most "respected" brand.

Why #1 Brand?

The Chinese government desires 'soft power' and 'international status' as Hikvision's Chairman statement above indicates. Selling a lot of 'widgets' by itself does not deliver such status. Think of the prestige of Japan's Panasonic and Sony brands or South Korea's Samsung. The Chinese government is not simply interested in profits like typical Western corporations think. As a government owned company, Hikvision is especially cognizant of achieving the government's greater goals.

the last part "cognizant of achieving the government's greater goals"

Im not sure i fully understood this paragraph and this sentence but what I feel its alluding to is "why would Hikvision want to be #1 in the surveillance industry when their main goal, being government owned, is to possibly use their products to initiate cyber warfare and/or other types of activies that would benefit the Chinese government?" If I got it wrong, what others goals did you mean when you said that?

What if you took it from a different approach though and actually took Xi's word for it that all he really wants for Hikvision is to be the #1 brand in the industry, create the best products in the market, be highly profitable in the process, and give China something to be proud of? Isnt this the main goal of most all businesses, to be the best they can be. What if the investment that the Chinese govt has in Hikvision was used simply to achieve "greatness"?


Sean-

It is against the IPVM viewpoint to understand Hikvision as a business that is selling product on the open world market. They cannot see that. You will always see phrases that relate to " business they have done with the government", never mind that they have done 4 times as much business as AXIS outside of China, that does not count in a IPVM world. If Hilkvision was made anywhere with the exception of North Korea we would not be having this discussion. Hikvision discussions always revolve around "government" because the quality is above average in all cases and many times exceptional. No one has any '"proof" that Hikvision has ever done anything mis-mischievous, yet the accusations persist. Hikvision will never be accepted as a business on their own, making good products and selling them on a open market. The view on IPVM will always be slanted against them no matter the product quality,exceptional service or company ownership.

never mind that they have done 4 times as much business as AXIS outside of China

Marty, that's factually wrong. Hikvision's branded business outside of China is equal or less than Axis's. Even including all of Hikvision's dozens of OEMs, it is still not even 2x Axis. This is based on 2016 revenue ($4.67 B for Hikvision total, ~$1.4 B outside of China, ~$700 M outside of China branded vs $820 M for Axis).

While we are on the topic of factually wrong, you still have not corrected your factually wrong assertion on the Hikvision dealer round table discussion.

Also, for the record, you clearly imply that you did not to China with Hikvision. Is that true? Have you gone to China with Hikvision?

on my recent return from china i had an interesting chat with one of hikvisions online suppliers he said their the biggest in china 12m usd in sales

he was concerned his targets were continually going up and he use to have 2 local hikvsion competitors now he has 10 and hik continue to set unrealistic growth targets.but hik had a solution for him the product would no longer be locked into chinese he can now get the full range in english and sell it through amazon market place world wide

giving him access t the usa without any cost other paying amazon as he works on 5% margins having a relatively low cost base he i would predict would win any price war

if you didnt think hik and dahua dumping through lorex into costco was bad enough

check out what will happen when amazon do worldwide fullfilment direct from china

the net from hik and dahua gets tighter and tighter they already sell direct in china

ezviz and roughly translated dahua online brand translates into orange

with the help of amazon and alibaba wont need any of us soon so who knows how much the actually sell

its not the cyber back door should only be concerned with its the brands they use to directly poach the end user

you dig your own graves supporting hik and dahua

John-

Thank you for the reply. I was quoting you from one of the other posts, possibly I mis-understood, where you corrected someone and said AXIS had <1 billion in sales and I think you said Hikvison had >5 Billion, so that is that.

I am still awaiting the minutes from the board meeting that you said you would provide that clearly demonstrated the head of state in China (whoever that may be) directly instructed the engineers and doctors at Hikvison, yes.

As for the record my voice regarding HIKVISION has been the same for as long as I have had a voice in this forum. There is no change, nothing is different, nor do I have any plans to change any of my positions on any subject concerning HIKVISION. So to answer your question regarding "have I been to China with HIKVISION" I will leave that open at this time, but thank you for asking.

They can be a bit thick down at hik

polo Cai their vp when first applying for visa to the USA put down member of the communist party back then the USA had the common sense to refuse his visa

why did they ever change their minds

I see a few stumbling blocks ahead for Hikvision to reach the goal of becoming the premiere brand in our industry.

1) Communist government ownership will always be a non-starter for some. I am unsure if complete divestment by the government would even suffice at this point for these critics. I am unsure how this could be remedied going forward.

2) With Trumps promise impose import duties to even the playing field with US based companies, this could be a huge stumbling block for companies like Hikvision, Dahua, and UNV. If Trump could get this plan in place, and I don't think he can, it would severely limit their advantage in the legitimate US market.

3) Overall professional aspects of their business are lacking the final attention to detail that most US based firms get right. Their website is missing content and isn't the easiest to navigate. Their marketing materials and ad campaigns don't seem to make sense. The whole dancer campaign seems strange to me, at least. If they could find a way to complete these small details, they could appear to be a more professional, competent competitor to the west. They still have the appearance of an Asian based company and that, historically, has meant second class, if only in corporate image.

4) Better software that is written with help from western based devs would go a long way to help. Currently, 5200 is not the level of quality needed for US based installs. 4200 is not really viable for multi site or larger installs. They lack support from major VMSs when you consider their built in analytics. If they had their own VMS that was on the level of the other major VMS brands and allowed the full use of their analytics, they could simply laugh off the Genetecs of the industry. This, I think, is already in the works, or at least I hope.

HIKVISION will never be number one with the current mindset of doing business and unethical approach of cheating and competing against their distributors. I wanted to highlight that many of distributors of HIKVISION are going legal against HIKVISION for cheating and leaking info about their projects, quoting direct to end users and selling end of life stocks to their distributors who ended up paying huge money for stocks that layed in their warehouses. I can see may of the system integrators moving away from HIKVSION.

I'm glad too see you waking upto reality

maybe too late I dropped hikvision distribution 10 years ago saw this coming then

their uk sales at 70 m pounds and hoping to grow to 120m

same nonsense strategy greedy wholesales make poor commercial decisions as hik makes pricing volume based and stuffs the channel

you want 30k of inventory they make you buy a 100 k of stock

and 50 k just sits on shelfs going more and more out of date

as I said before hik dahua will bury you alive whilst at the back door

their stealing your customers direct

because your over stocked you give credit at low margins to customers with poor credit history

low margins and bad debts

they don't care they have government backed insurance you go bust

you have beta tested their flakey products honed them made them work

over years and your reward

no profit bad debts and no customers

go down Home Depot buy a shovel and dig your own grave

They could write into their OEM agreements that there must be a Powered by Hikvision label in a visible location, like Intel processors. With the 50+ "manufacturers" OEMing their equipment from Hik it seems like this would make them a much more visible brand. Whether that is desirable or not is debatable.

Oem hide the brand to try and retain margin

they soon get outed

so know future for them

if they in the installer channel

the likes of lorex have hope they just massive retail orders and can switch between hik dahua raysharp etc..

no app vms loyalty

installer once tied into a manufacturer vms or app

easy pickings for any oem or original manufacturer to pick up

dahua knew we had established their pss smart pss in uk

for 7 years so customers familiar with it

so when they sold direct to

my customers 20 percent below my cost price on brand they took 40 percent of our sales

as we had ordered cameras etc and had them in the pipeline took us 2 years to manage our inventory we had to finance 5 m usd of stock at one point while we rebalanced many companies would have gone bust

If Mick is right:

"the product would no longer be locked into chinese he can now get the full range in english and sell it through amazon market place world wide"

This is a slap in the face to all their US employees, distributors and integrators. Locking the Chinese imports out of the US is currently their #1 defense to their #1 US employeee and partner complaint. If they betray their US employees and partners by doing this, they've shown their true colors and should be boycotted and sanctioned.

Growth at all costs is unethical and unsustainable.

Bump: resharing this. The past year has made this goal harder to achieve.

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