Well they aren't doing it here in Aus :(
Hikvision Addicted To Across The Board Sales
Published Jun 30, 2016 18:53 PM
Savvy or destructive move?
Across the board sales / price cuts from the biggest surveillance manufacturers are quite uncommon but Hikvision is proving that they will do it almost monthly.
In this report, we look at these moves and discuss their tradeoffs.
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Comments (27)
Campbell Chang
Jun 30, 2016JH
John Honovich
Jun 30, 2016Campbell, good point. We were talking to someone in Australia who said the same thing. They were actually surprised to hear the US tactics.
Campbell Chang
Jun 30, 2016I have no idea about US pricing but given where Hik place themselves in the market, I question the need to do things like this?
Surely if you're the largest player in the market AND are competitive in price AND reliable, why erode your margins further for what would have to be minimal gains?
U
Undisclosed #1
Jun 30, 2016...why erode your margins further for what would have to be minimal gains?
Dahua.
JH
John Honovich
Jul 01, 2016U
Undisclosed #1
Jul 01, 2016If its Dahua, why do the sales / price cuts in the US but not AU?
Maybe because Dahua isn't trying to get business at all costs in that market?
Take 25% off these prices (for AUS $) and they're still much higher than US retail.
Campbell Chang
Jul 01, 2016Those are retail prices here in Aus though. Trade price is sub 200. Hik prices are similar.
It's not unexpected though since the well known "Australia" tax applies to almost everything.
U
Undisclosed #1
Jul 01, 2016Agreed, Retail.
Point being that Dahua is not pulling out all the stops in AUS, like in the US.
Therefore HIK has no reason to react.
For instance the US retail on the 3MP 4300C is ~$80 USD where in AUS just the 2MP 4200C is > $200 USD.
Sorry, I only have retail prices to go on.
JH
John Honovich
Jul 01, 20161, I do not think you can compare any AUS pricing to USD. As Campbell notes:
the well known "Australia" tax applies to almost everything.
All surveillance products seem to be much more expensive in Australia compared to the USA.
I am not sure of the cause but this makes price comparisons difficult for pretty much any product.
U
Undisclosed #1
Jul 01, 2016It's very simple.
Campbell's points are
- Hik is not aggressively cutting prices in Aus like in the US.
- Hik prices and Dahua prices are similar in Aus.
Campbell's question is why is Hik cutting prices so much in the US.
My answer is because of the pressure from their smaller rival, Dahua.
You object with
If it's Dahua, why do the price cuts in the US but not Aus?
My answer is because Dahua is not pressuring Hik in the Aus market, unlike the US, as Campbell indicates.
Where's the difficulty?
JH
John Honovich
Jul 01, 2016Dahua is not pressuring Hik in the Aus market, unlike the US
I do not see the facts supporting.
Let's start with the US market. Dahua had a horrible 2015 in the US. I don't think anyone could dispute that. Despite that Hikvision ended 2015 with 15% off across the board. That does not make sense.
This spring, Dahua actually increased prices in the US. But Hikvision has since done at least 3 across the board sales. That also does not make sense.
I am not an expert in the Australian market (nor are you) but, from what I know, Dahua is better organized there than in the US.
That noted, again I am not certain why Hikvision is doing what it is doing in the US, but I don't think it's because they are scared of Dahua USA.
U
Undisclosed #1
Jul 01, 2016Let's start with the US market.
To be clear, my original "Dahua" comment was only about the US. AUS was introduced as a counter-argument to mine.
This spring, Dahua actually increased prices in the US.
Ok. I wasn't aware. Was that at the wholesale level, or retail or?
In any event, they *were* lower priced, do we think they are now higher?
But Hikvision has since done at least 3 across the board sales.
Predicted bloodletting. As you know, bloodletting means intentionally spilling your own blood.
That also does not make sense,
Undercutting your competition price, even substantially is a common tactic, and in the absense of a competing theory, remains the most plausible.
IMHO.
U
Undisclosed #1
Jul 01, 2016This spring, Dahua actually increased prices in the US.
Now that ADI carries both Dahua and Hik, perhaps there is a recent mailer showing both? That would be interesting...
Anyone?
JH
John Honovich
Jul 01, 2016
U
Undisclosed #1
Jul 01, 2016Hey, I just wanted to compare Hik and Dahua, and you go and include all these other brands like Flir, Honeywell, W-Box and Digital Watchdog... ;)
Steve Beck
Jul 01, 2016Another thing to point out. Sometimes the monthly sale price of a particular model is cheaper than if the product is not part of the monthly but you purchase with the 10% discount at a different time. Now things get really cool when get to double dip. 10% off plus the sale price.
JH
John Honovich
Jul 01, 2016U
Undisclosed #2
Jul 01, 2016With this discounting it could in fact be driven by the distributor rather than the manufacturer.
Companies like ADI might be using the Hikvision Promo to get people in the door and then upsell or cross sell them other product lines. It could also be to clear inventory or boost end of month sales.
It would be interesting to know who is taking the cost of this promo. Does Hik give ADI a 10% discount which is passed through or is the 10% taken off the ADI margins?
JH
John Honovich
Jul 01, 2016With this discounting it could in fact be driven by the distributor rather than the manufacturer.
It could be but since both Tri-Ed and ADI are running it simultaneously over and over again I doubt it's distributor driven. Plus, why would Tri-Ed and ADI cut out most of their margin to help Hikvision and not Axis, FLIR, DW, Samsung, etc., etc.?
And ADI does not do favors to any vendor unless they are getting paid for it. My gut feel is the opposite, Hikvision needs to pay Tri-Ed and ADI to run those fliers in addition to doing the discount.
UM
Undisclosed Manufacturer #3
Jul 01, 2016yes, that they will hurt margin by many across the board price cut. however, they have a goal of revenue target to meet, if they don't meet, then they may get a huge inventory and that's even a big problem. They don't have to make a profit in short term, they may quickly get a bigger market share and they may also get free advertisement by the attacks from all of their opponents, and critiques from IPVM.
This may be not a good choice, but if they keep revenue growth, they may get government compensation and tax return , because they keep the employment and help suppliers to clear inventory. This is better than doing nothing.
JH
John Honovich
Jul 01, 2016get free advertisement by the attacks from all of their opponents, and critiques from IPVM.
I am going to tell that Hikvision next time they object to our coverage ;)
They do not seem to be as happy for the 'free advertisements' such as Hikvision and the China Communist Party, Hikvision Exec Simultaneously Chinese Government Security Leader, Ezviz = Hikvision = Chinese Government, etc.
Sean Nelson
Jul 01, 2016I agree, no need to go with the aggressive price cuts. The prices are already good and the products are high quality. Running a sale every now and then is good but not all the time. If they need to move products at the end of the qtr, they should instead do sale based incentives for folks who buy volume, buy x amount and get x discount. But what do I know. Hik seems to know what they are doing, they are on fire right now.
Jon Dillabaugh
Jul 01, 2016I learned the hard way recently not to budget your jobs based on any sales prices. We recently had a project that we quoted and didn't realize the prices quoted to us included a limited time sale price. By the time the client decided and provided the down payment, the sale ended and prices were much higher. We were able to get a medium sized discount in good faith and a promise to make up the difference in the next larger order.
JH
John Honovich
Jul 13, 201610% Hikvision across the board price cuts at dealer events are also common, example:
Special @HikvisionUSAinc Training Session in #LongIsland w/ 10% OFF any #Hikvision products during the event pic.twitter.com/aK3IjA4ITM
— Brooklyn Supply (@BROOKLYNSUPPLY) July 13, 2016
JH
John Honovich
Jul 23, 2016And here is another one, less than 4 weeks later, now up to 20% across the board:
U
Undisclosed #1
Jul 23, 2016JH
John Honovich
Jan 27, 2017These Hikvision sales continue to happen into 2017 though with less publicity / flair than previously.
Today, is 15% across the board Hikvision at ADI:
