Report: China’s Systems Integration Market Mostly Shut to Outsiders

SHANGHAI — According to a new report by IMS Research, systems integrators aiming to find work overseas in China’s booming electronic security market are having a difficult time competing against locally-based companies.

While security equipment brands from abroad claim significant market share in China, local companies will continue to dominate China’s installation market for several years to come, according to the research firm.

Titled “The China Market for Security Systems Integration — 2011 Edition,” the report states only one overseas company is among China’s top 15 integration providers.

The report cites overseas integrators are limited to projects in only a few market niches, such as commercial and manufacturing.

The largest vertical markets supported by government investment, such as railways and utilities, are only open to foreign service providers on a limited basis. Further shutting out outside competition, certain industries are only open to local companies.

Still, China’s systems integration market is forecast to exceed $13 billion in 2014. Overseas service providers can expect to claim a share of the market, says Bo Zhang, an IMS Research senior research analyst.

Zhang describes the commonalities of successful overseas systems integrators in the report: “They are normally focused on high-end commercial buildings and manufacturing facilities. Typically they have global accounts who want to extend their business operations into China. These projects are not ones that local systems integrators can win.”

In addition, he states some overseas integrators also cooperate with their Chinese counterparts on projects that are funded by local capital investment.

“Cooperation with overseas design companies and project management companies in China is very important,” Zhang says.


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