Hikvision Dedicates $1.5 Billion To Dominate Western Market

By: John Honovich, Published on Dec 18, 2015

During our recent China trip, many companies inside China, including Dahua, lamented how Hikvision is destroying the video surveillance market, with aggressive continuous price drops to drive their expansion.

Last week, we exposed how Hikvision got $3 billion from a Chinese government bank but one question was not answered: How much of that money was going to be used outside of China? The answer: $1.5 billion.

In this note, we examine the impact of $1.5 billion dedicated for Hikvision's global expansion, their $10 billion goal and how they expect only a few companies will remain when they are finished.

How *** ** $*.* ******* *** ***** ************?

******* *** ****** ******* of ****, ********, *******, Milestone, *****, *******, ****, and ******* *** **** is ~$*.* *******. **'* a ********** ****** *** the ***** ************ ********.

Excludes Manufacturing and *&*

**** **** ***********, *** $1.5 ******* ** *** West ** ********* *** sales, ********* *** *******, as ********* **** *********** all ************* *** *&* inside ** *****. *** inside *****, ******* $*.* billion ** ******* ********** money **** ** **** for ********* *****.

Unconcerned ***** *******

**** $*.* ******* *** drive * *********** ********* amount ** ********* ** the ****, *********** **** by *********'* *********** ** absorb ****** ** **** continue ** **** *****.

** **** ***** **** any *********** ******* ** **** ******** be ** *********** ***** profits. *** **** ******* allows **** ** ******** with **** *** *** longer.

Major ************ ********

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

"********* ** '****** ****' to *** **** ** acquiring ****** *** ******** industry, *** **** ********* does ************ *&* ** its *** ** **** area.

*** ** ***********, ********* is **** ****** ** 'look ******' *****, ** said. **** *** **** access ******* ** *********, or ** *** **** a **** ** ******** that’s ******** ** ******** security."

***** *** ********** ********* has **** ******* ** undercutting ****** ** ** far **** **** ********* to ****** **** ********* from ********* **** ****, Arecont, ****, *******, ***., rather **** ****** *** of ****.

$10 ******* *** ****

****** *****, ********* ********* ************ $** ******* *** revenue ****. *** ****, Hikvision **** ** ~$* billion ***** *******, **** ~$3 ******* ****** ***** and $* ******* *******.

** *** *** ****, that's '****' ** ******** of ***% *** **** are ***** ** ** 50%+ ****** ** ****, so *** ***** **** is **********. ** *** other ****, *** **** more ***** *** **** take ****** ** ***** and *** **** **** can *** ******* ********** spend ** ************ ************** beyond *** **** ****** they **** **** ** the **** *** *****?

Only * *** ***** ********* **** ******

********* ***********'* ********, ** * to ** *****, **** a *** ***** ********* will ** **** ** the ***** ************ ********.

******, **** ***** **** ********* help ******* ** ********* that ****.

Western *********

** ** ***** **** money **** ********** ** guaranteed. ********* ***** **** mistakes, **** ***** ** impacted ** ******* ** the ******* ******* ** government, ** ** ********* expands ****, *** *********** response ***** ******, ***. Indeed, ** **** *****, the ******* ********** *** decide ** **** ** stop *********** *********.

*******, $*.* ******* ** an ******* *** ************* amount for *** ***** ************ company ** *** *** ************* expansion.

Comments (22)

and there goes the industry.. Flooded with cheap cameras sold through any means possible to anyone. No different to what they have done with solar panels they dump it in the market destroying western manufacture base, they they push the price back up at a later date. My prediction western governments will regulate the installation of security more to close the gap.
How will the legislation work? The profits on the camera side are not that great. PSIM & VMS enabled total solution that cater specific needs from the customers will take the majority of the profit. Let the Chinese take the bottom of the pyramid. Who cares.

The prospect of an organisation that is effectively owned by the Chinese government having such a hold over the visual surveillance/security market does raise questions around ..... security.

I will say that Hikvision has the clearest and most confident plans out of all of the Chinese companies which is why I think they have been so successful. They are focused on doing what they want to do and being the best at it and they dont care what anyone else thinks. The problem that I see, is that most other Chinese manufacturers are focused on trying to be Hikvision or trying to beat Hikvision. Dont try to beat Hikvision, you wont win at this point, just focus on being your own company and be amazing at it, try to differentiate in either your products or services you offer. If you offer similar products, then be better at the service that you offer to customers. A simple lesson in survive and adapt.

"I will say that Hikvision has the clearest and most confident plans out of all of the Chinese companies"

I agree.

"which is why I think they have been so successful."

That certainly is valuable but I do not think it helps more than the Chinese government ownership. The government ownership and massive funding would make most companies quite confident and clear.

"Dont try to beat Hikvision, you wont win at this point, just focus on being your own company and be amazing at it, try to differentiate in either your products or services you offer.If you offer similar products, then be better at the service that you offer to customers."

I am not sure that this is possible for smaller Chinese companies. For example, Hikvision has hired 200+ NA employees already, they have a team of reps at every random show, event, booth, AV dealer, etc. And they sell at incredibly low prices. How do you beat that and keep the lights on, something that Hikvision need not worry about.

there will eventually be s high water mark for China Inc, then watch the nasty slide as 800 million peasants demand electricity instead of their work subsidizing China Inc market distortive activities

Sounds like a great plot for a movie. Spread the product around the world for nix, then let the Chinese government flick a switch...

The more boring / non-movie plot is likely:

  1. Bankrupt the smaller companies (most everyone in Shenzhen, Taiwan, the OEMs in the West), make some of the mega conglomerates exit the market and focus on other electronics / offerings. When that happens, the reduced competition will ease price pressure, allowing stabilized or increased pricing.
  2. Get to massive international scale that allows for lowering average cost for sales, marketing, support, etc.

1 and 2 = profits.

Bankrupting the smaller companies seems well within reach, most of them had a bad, down 2015 and 2016 will almost certainly be even worse. By 2017, if Hikvision can keep the pressure on, we will see lots either (try to) sell out or close down.

Getting to scale is more questionable to me, mainly because once Hikvision is widely available in Western markets, many integrators will start pushing back against it. I think we will see this in the US in 2016. As dozens of integrators in a region sell Hikvision, markups will collapse on Hikvision and integrators will start becoming upset with them, looking elsewhere. In China, integrators are not really a concern, since the integration market is immature and Hikvision sells and supports direct routinely. In the West, this is going to be a lot messier.

I cannot see Western governments, particularly in these extreme times, allowing Chinese Government financed companies to dominate a particular market....particularly when that market is electronic surveillance that has a heavy bias towards internet/cloud connectivity......

I think HIK will dominate the retail and consumer/home market with it's products but those extremely high security verticals such as military, aviation, transportation, utilities (petrochem/oil/gas/electricity/water) will still attract specialist and niche product manufacturers that deliver a bespoke solution appropriate to the application rather than a 'fit from a range'......

Do not under estimate companies such as FLIR....they are aligning their focus on surveillance more and more and in the West, their brand image is strong - price is always an issue but if they address that then their status will hold strong against the likes of Far Eastern competition.

it is concerning that a company like HIK can dominate purely due to government investment, but I personally think they will dominate a certain sector of the industry and not the whole of it.

"I think HIK will dominate the retail and consumer/home market"

It's certainly heading that way.

I do think Ezviz is a potentially minefield. Hikvision is clearly working hard to obscure to consumers that Ezviz = Hikvision = Chinese government. If and when Western consumers realize that connection, a lot will be very concerned about using their products.

"Do not under estimate companies such as FLIR....they are aligning their focus on surveillance more and more"

That's an interesting point. They've certainly ramped up at the low end, with Lorex, who directly competes with Hikvision typically using Hikvision's Chinese rivals (e.g., Dahua). I am curious to see what they can do to stop Hikvision.

I do think that on the higher end of the market (certainly post DVTel acquisition) that FLIR might be more motivated and better equipped to push back against Hikvision there and make an issue of this with their entrenched government base.

shouldn't our government be protecting our markets?

Anyone buying or installing HikVision in the US is a pawn of the Chinese Govt pure and simple-I don't want to say what that makes a US citizen actually working for HikVision but you can figure that out for yourself.

Isn't that against the ideal of free market? LOL

...I don't want to say what that makes a US citizen actually working for HikVision...

An employee?

Yes-correct of the Chinese government.

But who else is hiring?

I think we could be opening Pandora's box. Is this much different than Pelco in their hay day? Hikvision still has to execute on all of this. There are a bunch of small nimble low cost Mg's in China that will still be around. Low cost mfg is moving to Vietnam and China will eventually have to deal with labor relations just like Taiwan, South Korea and Japan have had to.

Mfg Automation and product specialization will also keep Hikvision on there toes. On the Macro side of things - China has 15% top line Corporate tax rate - we (USA) have the highest corporate tax rate in the developed world and a broken banking system - anybody want to know how that impacts all of it?

There will be upheaval, but most of you will survive and thrive because we are the innovators of the world. The competition isn't going to simply lay down, it's not in our DNA. We will be fine.

Merry Christmas, Happy Holidays, and Happy New Year to all.

"Is this much different than Pelco in their hay day?"

Dennis, how is this like Pelco in their hay day?

Pelco dominated the market and set the standard for great support. I am willing to bet that the 1.5 bil is going to go heavy on VMS and support in addition to the cameras which it might be fair to say Pelco also ruled at one time.

Pelco never tried to lead on low cost or tried to drive down prices. Indeed, support costs a lot of money.

What's unprecedented about Hikvision is the combination of rock bottom prices and high end support, agree/disagree?

Hay Day is a fremium mobile farming app for iOS and Android.

I believe the term you gentlemen are looking for is heyday.

Dec 22 Hangzhou Hikvision Digital Technology Co Ltd

* Says plans to issue offshore bonds worth up to 600 million euros ($654.96 million)

Source text in Chinese: bit.ly/1mxqpEX

Read this IPVM report for free.

This article is part of IPVM's 6,534 reports, 880 tests and is only available to members. To get a one-time preview of our work, enter your work email to access the full article.

Already a member? Login here | Join now

Related Reports

Infinova, March Networks and Swann H1 2020 Financials Examined on Sep 02, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Hikvision Global News Reports Directory on Aug 13, 2020
Hikvision has received the most global news reporting of any video...
Huawei HiSilicon Shortage Impacts Surveillance Manufacturers on Aug 14, 2020
Huawei acknowledged problems and challenges for its HiSilicon chip business,...
China General Chamber of Commerce Calls Out US Politics on Sep 24, 2020
While US-China relations are at an all-time low, optimism about relations...
Verkada Raises $80 Million, Triples Valuation To $1.6 Billion on Jan 30, 2020
Verkada's rocketing valuation continues. 9 months ago, they got a...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
China Surveillance Vulnerabilities Being Used To Attack China, Says China on Apr 07, 2020
While China video surveillance vulnerabilities have been much debated in the...
TVT / InVid White Light Camera Tested Vs Hikvision ColorVu on Mar 18, 2020
With mega China manufacturers Dahua and Hikvision facing both bans and human...
Hikvision Put on US DoD "Communist Chinese Military Companies" List, Faces Risk of Presidential Sanctions on Jun 26, 2020
The US DoD has put Hikvision on a list of "Communist Chinese Military...
Intersec 2020 Final Show Report on Jan 21, 2020
IPVM spent all 3 days at the Intersec 2020 show interviewing various...
Fever Camera Sales From Integrators Surveyed on Jun 01, 2020
Fever cameras are the hottest trend in video surveillance currently but how...
Salesforce Drops Dahua and Hikvision on Aug 12, 2020
Salesforce has dropped Dahua and Hikvision as customers, forcing the two mega...
Apple Acquires XNOR.ai, Loss For The Industry on Jan 16, 2020
Apple has acquired XNOR.ai for $200 million, reports GeekWire. This is a loss...
IP Networking Course Fall 2020 - Last Chance - Register Now on Sep 23, 2020
Today is the last chance to register for the only IP networking course...

Recent Reports

OnTech Smart Services Partners With Google and Amazon To Compete With Integrators on Sep 25, 2020
A pain point for many homeowners to use consumer security and surveillance is...
The Future of Metalens For Video Surveillance Cameras - MIT / UMass / Immervision on Sep 25, 2020
Panoramic cameras using 'fisheye' lens have become commonplace in video...
Hikvision Sues Over Brazilian Airport Loss on Sep 24, 2020
Hikvision was excluded from a Brazilian airport project because it is owned...
China General Chamber of Commerce Calls Out US Politics on Sep 24, 2020
While US-China relations are at an all-time low, optimism about relations...
Verkada Disruptive Embedded Live Help on Sep 24, 2020
Call up your integrator? Have someone come by the next day? Verkada is...
IP Networking Course Fall 2020 - Last Chance - Register Now on Sep 23, 2020
Today is the last chance to register for the only IP networking course...
Drain Wire For Access Control Reader Tutorial on Sep 23, 2020
An easy-to-miss cabling specification plays a key role in access control, yet...
Norway Council of Ethics Finds Hikvision Human Rights Abuses "Ongoing" on Sep 23, 2020
Hikvision's involvement in "serious human rights abuse" in Xinjiang is...
IPVM Camera Calculator User Manual / Guide on Sep 23, 2020
Learn how to use the IPVM Camera Calculator (updated for Version 3.1). The...
Installation Course Fall 2020 - Save $50 - Last Chance on Sep 22, 2020
This is a unique installation course in a market where little practical...
SimpliSafe Business Security Launched Examined on Sep 22, 2020
SimpliSafe has launched "SimpliSafe Business Security" that the company...
FLIR CEO: Many New Fever Entrants "Making Claims That The Science Just Won't Support" on Sep 22, 2020
FLIR's CEO joins a growing number calling out risks with fever / screening...
China Bems Temperature Measurement Terminal Tested on Sep 22, 2020
Guangzhou Bems (brand Benshi) is the manufacturer behind temperature...
Axis Exports To China Police Criticized By Amnesty International on Sep 21, 2020
Axis Communications and other EU surveillance providers are under fire from...
Milestone XProtect on AWS Tested on Sep 21, 2020
Milestone finally launched multiple cloud solutions in 2020, taking a...