In the last five years growth of 29% per annum has been achieved and in CCTV/video surveillance this has been well exceeded.  Nevertheless, starting from its present position of being less than 25% of the size of the North America market, itself fast growing, this takes some believing.  However, i & i - Proplan have been charting the performance of this market since 1994 and its reports show that it has far outstripped any other market of size during the last fifteen years.  It is not just the growth or future potential that marks China out for special attention, it is the shear consistency of extra ordinary performance over the last 15 years that sets it up as the most attractive and consistent market in the world.  When i & i - Proplan carried out their first multi-client study on China in 1995 the best economic brains in the world declared that the current economic growth could not be sustained, but it actually went on to outperform.  Then in 2002 when we carried out the second edition of the study they advised that it could no longer defy gravity and growth would decline but it continued on at the same breathtaking pace and now in 2007 the experts say that economic growth will be sustained provided that the country remains politically stable.  No one doubts this or the important role that security will play in achieving it.

Market Breakdown

The total electronic security systems market in 2006 was worth CNY13,248 million and of this the CCTV video surveillance market has not only maintained its position as the largest of the three markets, but its growth has far outstripped that of access control and intruder alarm.

In 2006, the breakdown of the total Intelligent Building Controls (IBCs) systems market is a whopping contribution of 66% by CCTV video surveillance, 18% attributed to access control and 16% for intruder alarm.

However, the penetration of IBC(s) in China based on sales per capita is only 6% of the EU(7)1) average and therefore there is enormous potential for growth.  In 2018 when i & i - Proplan forecast it will become the largest market in the world it will still only have a penetration of 25% of the world? most developed markets.

Demand Drivers

The main demand drivers have been increased output of new building construction, particularly in the commercial and industrial sectors, rising crime and fear of crime, not least as a result of the massive migrant workforce.  The introduction, as part of the Government? 11th five year plan, of public security programs such as the Safe City Scheme (SCS), has given a mammoth boost to the sales of security systems, particularly in the area of CCTV/video public surveillance but it is also aimed at intruder alarms and its influence on the entire security market will continue to grow as the project is rolled out.

Opportunity

The China IBC(s) industry is therefore bristling with opportunity and the last five years has seen the emergence of several Chinese manufactures, particularly in the area of digital video surveillance technology, who have now established leading market positions.  At the same time, all the world? major players are active in the market and fighting to carve out a solid position.  Most have found it difficult to establish a firm commercial base and have been frustrated by barriers, which are now coming down as measures to implement WTO membership are introduced.  Their considerable effort is now starting to be rewarded as the market continues to expand at unprecedented rates and the playing field starts to level off, providing new strategic options to develop their business, including buying into established Chinese companies.