Strong demand for security in domestic key industries

As China's "Safe City" initiative expands further into second- and third-tier cities, global interest in public safety solutions has surged. This growing trend highlights how advanced security technologies and equipment are increasingly integrated into everyday life, making security products more accessible and popular worldwide. According to the "2012-2016 Security Industry Market Demand and Supply Analysis and Investment Direction Research Report," China’s urban intelligent transportation systems are expected to see total investments reaching RMB127.77 billion during this period, with over 70 billion yuan dedicated to video surveillance systems alone. This shows that the demand for security in key domestic sectors remains robust. Over time, China's security industry has evolved into three major clusters: the "Pearl River Delta" region known for manufacturing electronic security products, the "Yangtze River Delta" area characterized by high-tech and foreign-invested enterprises, and the "Bohai Economic Rim," where application, software, and service-focused companies predominate. Together, these clusters represent over two-thirds of the nation's security industry. Key players have grown rapidly, boosting industrial concentration. Between 2006 and 2011, the market scale expanded from RMB120 billion to RMB250 billion, reflecting a compound annual growth rate nearing 25%. Historically, traditional dealers and agents were the primary sales channels. However, in light of new developments within the industry, these channels are shifting focus. Currently, 67% of distributors and agents collaborate with project providers to minimize intermediaries and boost product turnover. Dealer partnerships account for another 45%, while direct collaboration between real estate developers and security agents represents a significant portion of business. Public security agencies, other industry users, and manufacturers also contribute to the client base. China Research Puhua suggests that large security firms should lead by leveraging brand reputation and service excellence to set industry standards, supported by competitive pricing strategies. Small-to-medium brands must similarly focus on improving product quality, enhancing customer service, and building their brands to avoid destructive price wars. Meanwhile, China Polytech Industries predicts substantial potential in the security sector from 2012 to 2016, driven by strong government support. Extended services and the entire security industry supply chain are expected to flourish. From 2006 to 2012, China's security industry market size grew from RMB120 billion to RMB250 billion, with a compound annual growth rate nearing 30%. By 2011, the market had reached RMB249 billion, averaging over 25% annual growth. China Research Puhua anticipates the industry will reach RMB500 billion by 2016, with a compound annual growth rate of approximately 20.24%. The industry comprises several types of enterprises: system integrators, distributors, product manufacturers, service providers, and alarm operation service operators. As of 2010, roughly 25,000 security companies operated in China, competing fiercely in a fully open market. Of these, there are about 14,130 system integration enterprises, 1,579 with official engineering qualifications, and 12,551 with local qualifications. Total industry output surpassed RMB250 billion, with security products contributing RMB120 billion and services and projects RMB130 billion. Added value exceeded RMB80 billion, a 1.8-fold increase from 2005, with both figures rising by over 23% annually. Despite challenges like the European-American financial crisis and domestic SME funding issues, the security industry maintained an annual growth rate of about 15%. This promising outlook has drawn numerous domestic and international firms to invest. As the Safe City initiative deepens across China, global demand for public safety solutions is accelerating. Urbanization is driving higher demand for basic security products such as intercom systems, which are already ubiquitous in city buildings.