EDITORIAL LETTER

Many friends in the security industry complain to me about the deterioration of the distribution channel. The current economic times are hard and all kinds of actors swarm the market. Thus, it is common for many to end up doing everything while the others are bogged down in maintaining that pusillanesque core with which one day they made themselves known. Some complain of unfair competition others boast of how well they have diversified their business.

So what's right? We are not the best placed to say so. However, a wild and unplanned mercantilist interest can end up affecting many companies and the worst, generating irreversible damage in a business segment.

One strategy that some have implemented is to look for a kind of hybrid in the marketing scheme. Before it was impossible to think about the proximity of the technological manufacturer (in this case security) with the end user. Today it is something imperative, but for the educational advantages that this has.

In no case should this lead to the establishment of unlimited competition between manufacturer and distributor, as it does not make sense. Rather, the proximity of technology producers to end consumers should lead to the strengthening of the distribution channel, allowing the manufacturer to know the needs of its latest customers and to pass them on to its direct customers. Manufacturers should specialize in technical support and education, not installation.

But integrators also have their commitments. The habit of selling any product to be won in the price war is not entirely good. Let us remember that we are all served by a very strong and developed chain; that way we will all eat longer.

For sure, what was perceived in the environment is that there is an urgent need for the emergence of a market with more solidity and clear conditions to inject the resources that are not now being put into developed markets. Latin America is always there, but, in other words, it is known that the region could be that market, but there is still no total conviction.

The safety industry is a patient in good health and still has significant room for manoeuvre in our region. Recently, a market research firm – IMS Research – recently cut its growth forecast for the global CCTV monitoring market, both analog and digital. While the company specifies that there are still possibilities for growth, they will not be as high as thought at the end of 2008. The markets most affected by this reduction will be Great Britain, Japan, Germany and the United States, and Latin America is not mentioned in the bad news, although it may be because there are no reliable records.

However, it is time to take advantage of the possibilities of scraping the pot, or perhaps I am being very optimistic. But large companies are looking for partners, trusted allies who guarantee them benefits at a time when they are very scarce.

Latin America continues to have a golden opportunity to be that partner. We cannot sleep, because another region will arrive in similar conditions that will refine its entire political and economic apparatus as Asia did a few years ago and we will continue to be a "hope". It is time for governments to consolidate economic and import policies that favor foreign investment. Local companies, for their part, should start considering quality certifications to ensure that all their practices are done under internationally accepted parameters.

Take the first step.

This worries me, because we could be opening a dark door to a dimension in which anything goes, in which practically "the end would justify the means", a vision too Machiavellian for my taste. And the worst thing is that in this scenario enter any type of practices to position themselves in a market and even to win projects or tenders.

I think what I'm saying is not very new. Perhaps some of those who read this column will know cases where this or that actor obtained benefits to impose himself in tenders thanks to "little help" for the final customers, or sometimes even deceiving them.

When this type of situation rarefies the environment, the markets are deformed, because not all players are governed under the same conditions and this, in addition, leads to the information that is available in that niche being biased, something that is of little interest to investors. Unfortunately in this scenario we lose everyone, even serious and renowned companies that have been doing business with total transparency and honesty for many years.

With this panorama in mind, one of the things we have to be clear about is that we all have to do our part so that the market develops every day. I know that I can be repetitive with this argument, which surely you have already seen touched tangentially in other publishers, but the doubts that often arise when talking about the Latin market give to think that this is a never-ending issue.

I therefore invite you to continue informing the market in the best way, recommending not to buy based on prices, not to participate in unclear negotiations even if the margins are very good and to insist on other decent practices. Very dreamy? Maybe, but this is still free, so I take a chance.

A cordial greeting, with all certainty.