Hikvision 20% Price Cut Twice In A Month

By: John Honovich, Published on Aug 23, 2016

Days after celebrating the Chinese government's commitment of up to $3 billion USD more in funding, Hikvision USA is now launching up to 20% across the board price cuts on all products for the second time in less than a month.

In this note, we examine the winners and losers of this move.

**** ***** *********** ********** **********'* ********** ** up ** $* ******* USD **** ** *******, ********* *** ** now ********* ** ** 20% ****** *** ***** price **** ** *** products *** *** ****** time ** **** **** a *****.

** **** ****, ** examine *** ******* *** losers ** **** ****.

[***************]

20% ****

*** *** *** **:

**** ***** **** ** days ***** *** **** one:

** ******* ***** ***, Hikvision *** ******* **% across *** ***** **** at *** *** ** additional *** ** ***-**.

Unprecedented *****

**** ** ************* ** the ***** ************ ********. Even *** **** **% off ****** *** ***** is ********* ****, *** for * ***** ************ to *** **** ***** in **** **** * month (*** *** **** at *** *** ** a *******) ** **********.

Winner - ********* ***** ****

*** **** **** ** that ********* *** ** shaping ** *** * super-charged **, ******* ** terms ** ******* *** probably **** ** *******. The ****** *** **** is **** ***** ********** will **** ** * lot ** ***** ******** (especially *** ***** **** dealers ******** **). ***** gross ******* **** ** further *******, *** ***** revenue ***** **** *** fixed ***** *** ********* costs **** ******* *******.

Loser - ********* **** ****

*** ******* ** ********. They ****** **** **** or **** **** ****** a *** ****.

** ********* ************ ***** discounts ****:

  • ******* **** **** ** they **** *** '*****'
  • ******* **** **** ** they ********** ********* ***** another *** **** **** or *****
  • *** ***** ********* ***** and ********* ***** *** remain *** **** *** with *** **** *******

** ******* ** *********. If *** ****, ******* tanks *** ****** *** severe ** ******* ** not *** ***** ******+ ** *****, ********* and ******* ********** ******* **** ******* the **** ** *******.

Dahua *** - *****

***** *** ** *** biggest ********* ***** *** could **** ** * target ** **** ****. Dahua *** ******* ********* real ***** ******* ** their ***** ******** **********,******* ** **** ******* ADI********* ****** ******* (****** poorly).

**** ********* ******** ******, it ** ***** ** put *********** ******** ** Dahua's **** ** **** up *****. **** *** certainly ***** ********** ** 'not *********' *** **** will *** *** *** average ****** **** *** be **** ********* ****** they *** ************ **** Hikvision's ******** (***** ** not * ******* *******). If ***** *** ********* enough, *********** ** *********'* price ****, ** ***** push ***** ** **** up (** ** ***** scale ****) ** ******* sales. ******, ***** ***** significantly ********* *** ****** earlier ** ****, **** is *** ****** **** are **** ***** ********* than *********.

Everybody ** ***** ** *** - *****

**** * *** ***** cut **** * ***** who ** ******* ******** marketed *** *** ***** hurts ******* *********** *** stock ** ***, *.*., Digital ********, ****, *****, Ganz, *******, *********, **********, Dahua, ***. *** ** them ********* **** ******* of ***** ******* *** satisfied ******* *** **** not **** ******, ***, at *** *******, ***** the **** ** **** cut *** **** *****-*** dealers *** **** *** the ******** *****, **** will **** * *********** impact.

How ** **** ***?

** ****** ***** **** the *** **** ** this **. ** ********* is * ***** ****, though ********* ** *** immense ******* *** ******* of *** ******* **********.

Comments (20)

dont worry they can go about as far as 6 billion dollars will take them.

I am personally waiting for when they pay you $100 dollars to take the camera off the shelf.

or even better

"for limited time this week...."

I don't think you're granular enough. I think it's going to be just like the "blue-light" special and be offered by the hour or possibly minute. Door buster sales on products - first 100k customers get an extra 50% off the already discounted product price...

"How It Will End?"

Based on the precedent so far it will continue with more funding from the Chinese government. Until that well runs dry (can it?) I believe it will continue unabated. Action would need to be taken by the US government to artificially inflate costs to offset the artificial cost decreases in China. I don't see our government (under any party) taking that measure.

How will it end?

Badly, for HIKVision eventually, and for everyone else much sooner. I can only imagine how much R&D budgets are going to get cut going forward in order to focus on more "low cost" options rather then advancing surveillance technology forward

I can only imagine how much R&D budgets are going to get cut going forward

My inclination is the opposite, that sales and marketing would be cut. I do not think R&D would be impacted since they are largely building these cameras for their home China market which is 3x-4x the size of the International one.

The bigger risk, I see, is on their sales and marketing spend since that, unlike R&D, needs to be spent market by market. And Hikvision is spending plenty of sales and marketing. Their USA team, e.g., is roughly the same size as Axis and Avigilon, they spend either the same or more on trade shows and trade magazines as Axis and Avigilon. Typically, the point of expensive local sales and marketing spend is that you do not need to 'drop your pants' monthly to win deals.

Looks like HIK has found a way to change the rules to that game by doing both

In the short term, you can do both, the question is the long term sustainability.

I suppose long term with minimal profits/maximum cuts is easier to do when your government sponsor "backers" are more interested in economic domination then profits

when your government sponsor "backers" are more interested in economic domination then profits.

Why be interested in economic domination if not to profit?

Funny - I do not think you know what that word (profit) means (in the truest sense). Reference: Adam Smith - Wealth of Nations - read it and then talk to me about profit (not manipulated by government intervention and subsidy). The market should set the price (not a government through funny accounting) ...

...Adam Smith - Wealth of Nations - read it and then talk to me...

Ok. I think you'll like it.

For instance, this seems relevant:

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy..."

Adam Smith - Wealth of Nations

Do you think we can make cameras cheaper than China?

Cheaper than Korea?

Cheaper than Taiwan?

The fund committed might have a string attached, or VAM(Valuation Adjustment Mechanism) for certain market share %.

"It becomes an addiction."

And Tri-Ed is now running the same promotion, with moderately higher minimums:

I can't believe they would both run the same promo on the same brand simultaneously, with only a 1 day difference on the duration. I have never seen anything like this.

And ADI just sent out another email blast for the Hikvision sale.

Keep in mind, ADI charges for these emails so they are making money from this as well.

How about this for some light entertainment!.

Truth is stranger than fiction...*

unaltered graphic.

The article posted in Bloomberg today (Chinese Takeovers Trigger Global Backlash Ahead of G-20 Summit) speaks directly to this. I know I've beat this drum repeatedly, but our government (and it's flawed trade agreements and organizations) need to pull its proverbial head out of its a**. The Chinese market is the most "closed" and "elusive" market in the world with the most protectionist and unfair trading practices know to the WTO. They get away with destroying foreign markets by flooding it with inexpensive equipment that is WHOLLY subsidized by the Communist Regime with no consequences. The US and Western governments need to put heavy tariffs on products coming in from countries that do not allow us reciprocal access to their markets.

And a month later, another Hikvision 20% off sale, though this time Hikvision is marketing it directly and limiting it to a subset of products:

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