Hikvision Aims For #1 Brand In 2020By: 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
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.