international outlook: asia Specialisation takes Merit Lilin to new markets The Taiwanese IP camera manufacturer Merit Lilin has decided to change its strategy to specialise in order to avoid commoditisation. “It has taken us to markets that we had no awareness of a few years ago”, says Jason Hill, Vice President of Merit Lilin. By Henrik Söderlund Merit Lilin was founded in 1980 in Taipei, Taiwan, and must be considered as one of the veterans within the video surveillance and physical security industry. Merit Lilin is a privately held company and has some 400 employees. According to Jason Hill, there are an increasing number of manufacturers interested in volume, driving the price down. Merit Lilin has anticipated a plan for the consolidation of the market which is being driven by the big two Chinese brands according to Jason Hill. “That means more and more standardisation. We can see where Hikvision and Dahua are trying to go with their strategies, but that is fine because it leaves a space for a manufacturer like us who has a tremendous amount of experience and all the resources and ability to be able to adapt and develop solutions that nobody else can”, Jason Hill says. New markets Three years ago, Merit Lilin realised that they could not compete on price with the two Chinese giants. At the same time, the company started to work with American manufacturers of automation products. “They were kind of holding a mirror at our business saying: Did you guys know that nobody else does this and that we had a conversation with you that we cannot have with any other manufacturer? And we did not know that, we had not understood”, Jason Hill says. Today, Merit Lilin is purely IP: No analogue products, no HD over coax products. “We have recognised now that IP really means integration possible for us. It means now that we can put video in to other systems, we can put smart data and control on to networks and start doing a lot more intelligent things as a result, rather than just thinking of IP as a way of getting video from A to B”, Jason Hill says. Therefore, most of Merit Lilin’s growth is coming from markets where they integrate video with other systems and solutions. “And often they are not the traditional things that you might think of. We are not talking about integration with VMS or access control, we are integrating with much more complex systems and actually in order for us to do that, the end user or our technology partners require us to achieve a level of customisation. That may be software or firmware or hardware, and actually this is now where we really recognise that we have some strength”, Jason Hill says. “Today, Merit Lilin is purely IP: No analogue products, no HD over coax products.” Home automation He is a little reluctant to talk in detail about the company’s new markets. “This has taken us to markets that we had no awareness of a few years ago. And this is where it gets sensitive because I do not want our successes to be publicised so that our competitors read the publication and say: Oh lets go and talk to these guys”. However, he says that many solutions that the company is working with now are coming from businesses outside of the security sector, and one of the areas is the home automation market. “There are other companies that have the same ability to make “It has taken us to markets that we had no awareness of a few years ago”, says Jason Hill, Vice President of Merit Lilin. IP products as we do and there may be other companies that have 35 years experience, but when you look at these key differentiators and you add them all up there is no other company that has the same set of skills and capabilities that we have”, says Jason Hill. educating sales people Merit Lilin’s biggest challenge is to change its selling strategy throughout the business. “People have been working for us for a long time and they are good at selling, but now they need to change and become much more consultative, and be much more of an investigator or a researcher to identify solutions with less of an emphasis on pure product sales”, Jason Hill says. He stresses that they do not know who their significant customers or partners are going to be next year or even exactly where this new strategy is going to take the company or to which market verticals – perhaps closer to the banking sector or more and more towards the automation market. “Because our sales people do not really know who they will be talking to, we have to educate them and then we have to develop a message on the market that says: If you want to talk to an agile manufacturer, who is willing to listen, talk to us”. Few SDKs Merit Lilin’s video and camera end products only have two SDKs, one for all the cameras and encoders, and another for the recording systems (i.e. NVRs) and decoders. According to Jason Hill, it is very important when you are looking into integration because many competitors will have a dozen different SDKs and that means a lot of development time. “For us, every product we release fits into that SDK, so it adds a lot of value to some people, but if you talk to an installer about that, he does not care”, Jason Hill says. The future market Jason Hill believes that there is going to be a knock on effect in the market. The consolidation is a result of more commoditisation of the products and he anticipates that there we will be less competitors in the video surveillance industry within a few years as the market consolidates further. He says: “There is going to be more of the traditional security market buying on price and devaluing the sector as a result. So for us it becomes a little less attractive. We have a strategy now, which is taking us more and more into specialisation and we are doing that on the back of integration”. 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