international outlook Hikvision – ready for acquisitions How the world´s biggest video surveillance product manufacturer plans to get bigger: Hikvision now has the capability to produce more than 160,000 security cameras per day. Detektor Magazine visited the world’s largest video surveillance manufacturer in Hangzhou, China, to find out about the company’s strategy for the future. “Within the next years, we will have more than 25 international branch offices and we are also preparing to locate 3–5 local factories in overseas markets”, says Keen Yao, International Marketing director. By Henrik Söderlund Hikvision was founded in 2001 and brought a compression card to the market as the company’s first offering. Since then, much has happened: Headquartered in Hangzhou, the company has expanded to become the world’s largest video surveillance manufacturer with a turnover of more than 3 billion US dollars. 14,500 employees The Hikvision headquarters is located in two towers in Hangzhou. The company moved in two years ago, accommodating up to 4,000 employees. However, only in 2015, the company hired 2,500 people and the office is just not big enough anymore and another office is being built across the road. In total, Hikvision has 14,500 employees, among which 5,400 are engineers. Hikvision started to expand internationally in 2006-2007 and the development of camera products started in 2008–2009. Today, the international business grows a little faster than the domestic and the growth rate in North America is higher than in Europe. “Our overseas business is still very young, but the growth rate is very fast”, says Keen Yao, International Marketing Director at Hikvision. Between 2004 and 2014, Hikvision had a CAGR of 53 per cent overseas. In 2012, the international turnover was 179 million US dollars, in 2015, it was 752 million dollars only after the first three quarters. The overseas business constitutes for 26.5 per cent of the total revenue. Ready for acquisitions The Hikvision CEO and Pre- sident, Yangzhong Hu, who is one of 28 people who founded Hikvision, talked to a group of trade media reporters, including Detektor Magazine, through an interpreter, in Hangzhou at the end of 2015. ”One of the key reasons for why we can do what we do today is because the Chinese economy has been very strong during the last decade. It gives us a very strong foundation and we have been lucky to have that strong base. And we are also lucky to have a lot of engineering resources in China”, Yangzhong Hu says. He was also asked to comment on Canon’s acquisition of Axis and Milestone. “It was a bit of a shock to everyone in the industry, but early on, the alarm industry saw some major acquisitions and now the focus is on CCTV. For Hikvision, there have always been three elements: the technology, marketing and mergers and acquisitions. Our focus has been on the first The Hikvision CEO and President, Yangzhong Hu, who is one of 28 people who founded Hikvision One of the key reasons for why we can do what we do today is because the Chinese economy has been very strong during the last decade. It gives us a very strong foundation and we have been lucky to have that strong base. And we are also lucky to have a lot of engineering resources in China two. But of course, when a good opportunity comes, we will take that opportunity”. Yangzhong Hu believes that the demand for security and safety is always a driver in the market but also stresses that video surveillance has moved from monitoring to become a management tool. “Now it is more related to local operations. And it will continue to be a driver for this industry as well”. Hikvision has different strategies for software in China and in the international market. “In China we are leading the trend of providing video management platforms for different verticals. In the international market, it is different. There, we are more focused on hardware and for software, our strategy is to focus on partnerships with companies like Milestone, Genetec etc”, Yangzhong Hu says. He also said it would be easier for users to have one single supplier that can provide both hardware and software. Hacking attacks In mid 2014, hacking attacks were reported on Hikvision products and Yangzhong Hu spoke surprisingly openly about this issue. He claims that users had chosen weak passwords and that Hikvision notified its partners to advise the end customers to change their passwords. In March 2015 a new structure was devised meaning that anyone setting up a Hikvision device now has to use more complicated software when launching the product. “Since May 2014, Hikvision has established Hikvision Security Response Center (HSRC) to take feedbacks, handle and announce the security flaws of Hikvision products and solutions. Apart from that we also partner with international cyber security companies to help us design a more complete system in order to prevent cyber attacks in the future. We are open-minded about this even though it is an annoying issue”, Yangzhong Hu says. Security News Every Day – www. securityworldhotel.com 34 • d etektor internati onal