Producing cheaply is not the only way

By: Editorial SEGURIDAD SALES
At the end of July, this media visited the facilities of HikVision, one of the Chinese benchmarks in terms of electronic security. Located in Hangzhou, Zhejiang Province, the corporation controls about 50% of the domestic CCTV market and has a sustained year-on-year growth of 60%. The firm has a presence in several of the most important markets in the world and set its sights on Latin America, where they hope to consolidate thanks to a strategy of permanent proximity with their distributors.

The visit included the corporate offices, as well as the production plants (located in the same city), where we could see the complex process that must be followed to develop a security solution.

Hangzhou is quite industrialized, and is one of the tourist poles of the country, combining a vast architectural wealth that immediately refers to the dynastic times of the country with the most modern Western shops. The Audi, BMW, Mercedes Benz and even Lamboghinis – it is said that it is the Chinese city with the largest number of millionaires – walk like Pedro through his house. The only difficulty is that few people speak English, something that is attenuated in companies dedicated to technological creation.

After a 12-hour flight from Los Angeles to Shanghai, and three more hours by land from this city to Hangzhou, we arrived at the main headquarters, where the International Department is located. After claiming at the reception the identification that would allow us to move around the building, we met with Tony Yang and Yu Ning, director of international marketing and regional manager for the Andean Region and Caribbean, respectively. The message that is clear in the talks with officials is that the important thing is not to manufacture a camera or DVR, but a unit that really satisfies what the market requires today, which, they said, are quality solutions, good performance and an affordable price.

And being consistent with the above, the company has based its strategy on an exhaustive work in research and development (R & D) that makes a large part of its staff composed of executives (engineers) dedicated to creating and constantly improving the products that come to market, as well as those that manufacture for OEM customers, that is, those who have their own brands.

Starting at the end
Yu Ning would be the guide chosen by the corporation to show us their facilities. The first stop literally took us to start at the end, that is, to enter the exhibition hall where the connected solutions could be appreciated and in full operation. The offer is not small and is a reflection of the knowledge that the company holds when it comes to video management.

"HikVision was born at the beginning of this decade with an experiment of a group of engineers who had accumulated a lot of experience working for a national institute of technological development, specialized in video research, which ended up being a competitive advantage," Yu said while showing us the functionalities of approach, image search, detection of specific elements and all the characteristics that a first-class camera should have.

A few minutes later Tony Yang, the marketing, would corroborate the above. "Starting from a national research institute gave us a huge advantage from the very beginning. Technology being the main business of the company, we have the ability to offer solutions that are really required in the market".

The first solutions that were observed were compression cards for PCs, which, coincidentally, were part of the company's first technological offer, back in 2001; little by little they were expanding their solutions with a clear objective: to offer a complete line of CCTV equipment for the satisfaction of the needs of the market.

With the entire portfolio of solutions behind us, Tony proudly explained that the first product they brought to market was compression cards. After this the company started working on dedicated DVRs, something that happened between 2005 and 2006.

Consequently, today's offering includes compression cards for PCs, and their two generations of digital video recorders. Currently this brand offers 1.3 and 2 megapixel cameras, as well as intelligent hybrid recording units based on a technologically advanced DSP platform. As a curious fact is the fact that this organization was one of the first to promote the H.264 algorithm as a compression method for video surveillance.

A CCTV solution is born
When leaving the exhibition hall, and in the middle of a temperature of 37° C, we leave for the production and manufacturing plant of technology, where the first thing to do is to cover your head and shoes to guarantee the minimum conditions of asepsis that must be maintained in order to guarantee Good Manufacturing Practices, or BMP as they are known internationally.

For a device to leave the plant for the market, at least three quality management processes are required, in which officials verify, after each step, that the devices work as they should work. The same happens with the equipment that is made for OEM customers: exhaustive quality control processes and if the device fails, the repair and shipment of the same to the offices of the purchasing company is assumed.

Listening to all this data and procedures we wondered: What does this have to do with the image that Chinese safety products are of low quality and low cost? HikVision is not the cheapest solution on the market, but neither is it the most expensive. Apparently it is located in a medium range, but which, according to Tony, is not an impediment to offering the market high-performance solutions.

"What differentiates us from other Asian competitors is that usually many companies offer effective products because of their low cost, but we do not believe that this is the only way. Basically it is something we want to achieve, but what we consider most important is to provide added value to the customer, something that the end user will appreciate," Yang would say when perceiving some prejudice towards Chinese security teams.

And as if to leave no doubt, as skepticism was still on our faces, he said: "89% of security products are manufactured in Asia. Most security manufacturers make their products in this part of the world and if you trust their products then why should you have problems with a Chinese brand? The message we want to send is that when they buy from us they are not buying Chinese solutions, but HikVision technology, a company that is located in China."

At this point it was hard not to remember the journey between the offices and the production plants. On the western side of the city is located the new city or the modern city as the hosts would say. "In a short time we will have our new production plant, which will be in the modern sector of the city. While we do it, there are more and more spaces that we have to enable to locate the new technicians we have hired to meet the demands of the dynamic world of security technology, "said Yu, a young man of a little more than 20 years, with a cheerful physiognomy and a sharp look that springs from behind round and small lenses.

In this company they are aware that they are not yet as big or as recognized as the big players in the market, which even have more diversified portfolios and different business schemes, but they assure that they are taking advantage of it in the best way, in terms of marketing, image and corporate development.

"One of the things we are focusing on is to have a presence in all regions of the world such as Europe and the United States, where we already have an office in full operation. The main objective is to give adequate attention to the market," said Ning as we moved from one floor to another in the first building.

When Yang arrived, he began to talk about the future plans of the company, which is investing significant resources in the IP world, without neglecting the analog business. The reason for this duality could lie in the fact that although it is undeniable that network cameras are the trend for the coming years, the world does not seem to be yet prepared to accept it en masse or perhaps it is not so necessary and this technological advance could be aimed at certain types of applications.

"In China the network infrastructure is very developed, but it all depends on the scenario. There are several interesting facts to share. Look at the UK, which is the most established electronic security market in the world, with a density of one camera for every five inhabitants. There, even with this reality, the market is mostly analogous, because they cannot replace the entire structure," said Tony, in the middle of the conversation.

However, it is important to keep in mind that much of the world already has the necessary infrastructure to apply network video solutions or IPTV as the most futuristic call it. China – Southeast Asia in general – and northern Europe are "very IP" regions.

"One of the reasons why China has become so inclined to IP is because of the resolution of the image, because with this technology you can clearly see the details; in certain applications it is not good to have an image recorded and not be able to say for sure what the people who look in it look like. The application of IP is closely related to the project, but in Southeast Asia and China in general the majority is still composed of analog systems," Yang added.

But this is not the only aspect that will have to be talked about in the coming years, because for HikVision another of the great needs of the market is in plug & play systems, functionality that makes systems much friendlier. "Of course, if we wanted to talk about making things easier and more effective, we would have to mention IP and smart video," Yang said with a slight smile.

HikVision and the Global Security Market
In a conference room, located on the 3rd floor of the office building, Tony and Yu were talking about the different world markets in which this company has made a presence. There was important data, although without a doubt what we were looking for was to know the opinions about Latin America and the prospects of the business.

Yang began by referring to the Middle East market, which he said is developing quite a bit, driven mainly by hotel and commercial building construction. "You have to keep in mind that in this region there is a lot of critical infrastructure that nobody would want to be at risk. That is why the government is almost always the main customer of security providers," he said.

Until the main course arrived. Yu Ning was quite happy, because the performance in the region has been quite good: in two years they have had a year-on-year growth of 100%. "Latin America is the last continent we are entering, we have already done it in Europe and North America. We have been in the region for two years and before that we had done practically nothing. We have a good strategy, just as we did in other regions, we combine everything to really be able to feel the region. We have good agreements in Mexico, Venezuela and I think Colombia is going to give us good results too," said Ning, while watching as a young worker did focus tests on the cameras, to verify that she does transmit the appropriate image.

Shortly after, the visit to the HikVision plant would end. It couldn't end without the question of exploring other business niches, such as LCD screens and other possibilities for A/V. Yang answered categorically that "our core business is video and everything around it is possible, but for now we prefer to focus on many areas that remain unattended and where we can perform well."