In recent years, the security market has shifted from its traditional focus on municipal and commercial sectors, now expanding into the civilian domain. While this new segment is growing rapidly, it still faces significant challenges—most notably, the lack of unified standards that hinder its full potential.
The rise of initiatives like "Safe City" has propelled the security industry forward, but it's the emergence of "Smart Home" that marks a turning point for the civilian security market. According to Deng Wenjie, Executive Vice President of the Shenzhen Security and Prevention Industry Association, the civilian market holds immense potential, though it's still in its early stages. Similarly, Jiang Haiqing from Hikvision emphasized that although security products for civilians are still in development, their future looks promising.
Major players like Hikvision and Dahua have already begun their expansion into the civilian space, and many SMEs started targeting this market as early as two years ago. According to data from the Institute of Advanced Industrial Science and Technology (GGII), the smart home market was valued at around $42 billion in 2009 and has been growing by 20%–30% annually. By 2015, it’s expected to reach 124 billion yuan. The advancement of technologies such as IoT, cloud computing, IPv6, and ZigBee has further accelerated this growth.
In 2012, the civilian security market grew by 20%, significantly boosting the deployment speed of security companies. Deng Wenjie predicted a 30% growth rate in 2013, with explosive growth expected by 2014 as smart home applications become more widespread. Chen Zongnian, Chairman of Hikvision, noted that both governments and individuals are increasingly aware of the importance of safety, creating new opportunities for rapid business expansion.
Hikvision has launched several security products tailored for the civilian market, focusing on small businesses and families. Its 2013 strategy centered on service-oriented solutions, aiming to meet the diverse needs of everyday users. The residential sector in first-tier cities has been the main driver of this growth, with companies competing fiercely for market share. However, as the market expands, security firms are also entering second- and third-tier cities, and even rural areas, where monitoring systems are beginning to take root.
One of the key reasons companies are shifting toward the civilian market is the stark polarization in the industry. Large firms dominate government projects, leaving little room for smaller players. These SMEs, unable to meet the high technical and financial requirements of municipal contracts, are turning to the civilian sector, which offers a lower entry barrier.
Government projects often use the BT model, where companies pay 20% upfront, 30% upon completion, and the rest later—sometimes after one to five years. This creates heavy cash flow pressure, especially for smaller firms. Even large companies can struggle with excessive accounts receivable, leading to financial instability. In 2012, Hikvision reported a sharp increase in accounts receivable, reaching 1.597 billion yuan—a 68.46% year-on-year rise.
Industry analysts note that this issue isn’t unique to Hikvision but is common across the entire security sector. The market is divided into three main groups: a handful of top companies with over 1 billion yuan in sales, a few dozen with between 400 million and 1 billion yuan, and thousands of smaller firms operating in the 300–400 million range. These smaller companies form the backbone of the civilian market.
However, the biggest obstacle remains the lack of standardized regulations. Only a few sectors, such as transportation and finance, have strict industry guidelines. In most other areas, standards are either non-existent or not effectively enforced. This inconsistency prevents seamless integration of security products, making it difficult for system integrators to build cohesive platforms. As Zhang Yanli from Shenzhen Songda Technology put it, “Without proper standards, security products can’t truly go mass-market.â€
Jia Ruichun, director of the National Security Supervision and Inspection System Product Quality Supervision and Inspection Center Shenzhen Office, stressed that the lack of standards is a major roadblock. Existing building codes are outdated and not strictly followed, making it hard to promote uniformity. He also pointed out that the fast pace of product innovation makes it difficult for standards to keep up, and the standard-setting process itself is too slow and complex.
Originally planned to be released by the end of 2012, national security standards were postponed until June 2013 and then again to August 2013. A local camera manufacturer revealed that the delay is due to conflicting interests among different stakeholders. Without clear and enforceable standards, the civilian security market will continue to face obstacles, limiting its long-term growth and consumer trust.
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