Analysis of Future Development Trend of Security Industry

As the Internet continues to merge with various industries, internet-based products within the security sector are now gaining significant institutional attention. Analysts believe that "internet connectivity" is opening up new valuation opportunities for the industry, even as traditional growth areas remain strong.

Looking at the performance of the security industry in the first quarter of this year, it maintained a positive trajectory. According to CICC analysts, visibility within the security sector has been increasing. The main driver of growth comes from international business expansion, while the domestic market remains stable. Four key trends can be identified from the data: First, high-definition technology is rapidly advancing; second, falling prices for digital cameras are fueling greater market demand; third, competition is intensifying, leading to higher market concentration; and fourth, the focus of competition is shifting toward platform software, highlighting the growing importance of integrated industry solutions.

As concerns about industry growth begin to fade, internet-based products from security companies are drawing increased interest from investors. According to research by Ping An Securities, IP-based networking is becoming more popular, and security systems are expanding in both construction and application. Security IT is emerging as a major trend. For security firms, extending the industrial chain—by expanding into cloud storage, cloud computing, and downstream terminal products—is essential to building a comprehensive video surveillance platform and meeting the challenges of IT-driven security. With the rise of the 4G era, surveillance videos can now be transmitted through mobile devices, paving the way for growth in the consumer market. Big data analytics are also opening up new opportunities in intelligent monitoring and security operations. Features such as public safety alerts, facial recognition, and data analysis are becoming increasingly important to users. Under these new technological conditions, the security industry is set to adopt a completely new business model.

In recent surveys, several organizations have highlighted Hikvision’s internet-focused products. A company representative stated that Hikvision has always supported innovation and that this move represents a strategic initiative to build an internet-based industry. This support is ongoing, and the company clearly recognizes that without internet capabilities, there is no future. Similarly, without a solid platform, there is no long-term success. The company is continuously exploring and testing new business models, which cannot be achieved overnight. Starting with basic platforms and apps, they aim to build a loyal user base. Once they achieve a strong product presence and a large user base, the business model will naturally evolve.

According to industry experts, the government is placing increasing emphasis on the development of smart cities and safe city initiatives. With China's continued urbanization, the security market is expected to grow significantly. In 2015, the total value of the security industry was targeted at 500 billion yuan. Alarm and monitoring systems are central to the “safe city” project and play a vital role in the broader social security prevention system. As the industry chain develops further, the future outlook for the security sector looks very promising.