Security & Surveillance Market - India

January 2009

Executive Summary
Market
Market size: Estimated at ~USD XX mn in 2008; x% of total security market (incl. services) Growth: Historic rate of y%: Forecast z% till 2010; x% p.a. until 2012 Import driven market CCTV and access control systems are major segments Northern region is the largest market followed by South India Government and industrial are largest customer segments; residential is very small Government and large enterprises purchase primarily through tenders while most private companies solicit quotations or consider referrals; retail is a recent new format The distributor model is important in the Indian market Drivers: Significant boost in demand from government and businesses post Nov-08 attack Challenges: Lack of awareness ; Disorganized industry; High import duties and taxes; Lack of many comprehensive solution providers Organized sector: Estimated ~x players (y major and z mid-sized) Unorganized sector: Estimated at x units but concentrating on basic, low-end products Despite many unorganized players, organized sector accounts for x% of industry revenue Demand for reduction in import duties and taxes may materialize IP and video analytics technologies are important in the future Private equity investment is expected to increase significantly at least till 2010
SECURITY AND SURVEILLANCE - INDIA.PPT

Segments

Business model Drivers & Challenges

LE P M A S

Competition Future Outlook

Market Overview Segments Business Model Drivers & Challenges Competition Future Outlook Key Developments

SECURITY AND SURVEILLANCE - INDIA.PPT

The Indian market for security and surveillance products is robust and growth is expected to accelerate in the future
Overview
The Indian security market including human guards, electronic security systems, intelligence systems, fire protection and detection systems is worth ~USD XX mn Security and surveillance systems account for ~USD XX mn in 2008, according to estimates of industry experts Historic and forecast growth rates were earlier estimated at x% However, following the Mumbai terror attacks, security spending is expected to surge by y% over the next two years at the least India is an import-driven market with ~z% of security and surveillance equipment imported by foreign manufacturers with local presence or domestic importers/distributors

Estimated Market Size and Growth

USD mn
Terror attacks in Nov-08 spurring growth in 2009 and 2010

1,500

H +x% F G

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1,000 500 0

E A B C

2006 2007 2008 2009 2010 2011 2012

Assumptions & factors

Consensus on 2007 market size: USD XX mn 2006-2008 growth rate: x% 2008-2010: Average growth of y% Post-2010: Average growth of z%

Source: SECURITY AND SURVEILLANCE - INDIA.PPT

CCTV followed by access control systems are products that have the maximum demand
Product Categories
CCTV
Cameras, housings, monitors, DVRs and NVRs Accounts for large share of security budgets Expected to continue growing the fastest
CCTV Z%

Share of total market

Access Control

Becoming a norm in most organizations Cost inhibits sale of quality products

Intrusion detection

Small market due to lack of awareness Cultural factors such as community living and reliance on human security inhibit market growth

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v% Intrusion Detection w% Intercom x% Others

y% Access Control
a%

Intercom (Audio and Video)

Used primarily in apartments Retrofits negligible; mostly sold through builders offering it as a value add feature
Proximity Cards Swipe Cards Smart Cards Biometrics b% c% d%

Others (X-rays, metal detectors etc.)

Greater demand from government & retail establishments as security efforts are stepped up
Source: Security Today The Indian Security Industry Market, May 2007 SECURITY AND SURVEILLANCE - INDIA.PPT

Drivers & Challenges

Rise in terrorist attacks and the November 2008 attack in Mumbai significantly pushing demand

Challenges
Lack of awareness and attitude toward security Disorganized market High duties and taxes inflating prices

Drivers
Government demand Corporate demand Retail and residential sector demand Lack of end-to-end solution providers

SECURITY AND SURVEILLANCE - INDIA.PPT

The market includes many unorganized participants but sales is concentrated with the largest players due to their capabilities
Competitive Landscape
The competitive landscape comprises organized and unorganized players Organized sector is estimated to comprise of ~x players including y major and z mediumsized manufacturers In comparison the informal or organized is estimated at x units However, industry estimates indicate that the organized sector accounts for bulk of sales Prominent organized players are

Market Structure
Organized Unorganized

y%

Foreign companies with Indian subsidiaries Local companies in partnership with foreign firms

LE P M A S
SECURITY AND SURVEILLANCE - INDIA.PPT

b% x%

a% Players Revenue

Manufacturers of high-end security systems are few in number with the informal sector geared toward manufacturing basic, cheap equipment

Source: US Commercial Service Surveillance Equipment India, Nov 2007; US Commercial Service Safety and security for corporates India, Nov 2007; Business Standard There's no business like security business, Jan 2008; Israel Economic Mission in India India Security Market 2004

The future will likely see reduction of duties and taxes, shift toward IP and video analytics technologies, and PE investment
Duties & taxes
Government may accede to industry demand for reduction in import duties and taxes to reduce cost and give citizens affordable access to security

Future Outlook

Products

IP-based surveillance and video analytics are considered to be the future in India

Private Equity

Private equity investment is expected to increase significantly at least till 2010

SECURITY AND SURVEILLANCE - INDIA.PPT

Thank you for the attention

The Security and Surveillance market report is a special feature from Netscribes. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA
Phone: E-Mail: +65 9651 6382 natasham@netscribes.com

Subhash Chennuri
Phone: E-Mail: +91 98190 59664 subhashr@netscribes.com

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