Russia - Country Commercial Guide
Safety and Security

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2020-11-14

Overview

Russian Security and Safety Market has the potential for steady development due to the country’s vast infrastructure, large geographic area, and high number of potential security threats. Traditionally dominated by foreign vendors, this market has experienced substantial changes in the last two years due to the rapidly changing political and economic climate. A weak ruble and sanctions have prompted import replacement and localization efforts. According to the market experts, the Russian safety and security market’s revenue is expected to show an annual growth rate (CAGR 2020-2024) of 20.3%, resulting in a projected market volume of US$391m by 2024. This assessment includes the sale of electronic equipment and video surveillance systems (VSS), access control systems (ACS), security and fire alarms and alerts (FSA) excluding fire extinguishing equipment, security, integration services, and the implementation of technical means.

Starting in 2008, the Russian market of electronic physical security equipment (EPS) grew 20% per year. Over 80% of technical security equipment sales take place in the Moscow and Saint Petersburg regions. The structure of the Russian security systems market is divided into three main segments (by market size). The largest segment of the Russian market is VSS. Its share is approximately 45%. The FSA segment is quite close to it with a share of about 35%. By some estimates, it is close to 50%, due in part to a significant volume of consumers from the public sector and regular inspections for compliance of other facilities with fire safety requirements. The share of ACS reaches 20%.

Since 2018, the FSA segment of foreign production dropped the most due to the concentration of local production (more than 65%). The growth drivers for the FSA segment in Russia are the following: growth of construction and increased requirements for facilities at the legislative level.

The VSS market showed positive dynamics. While market saturation did not allow the sub-sector to expand rapidly, an overall increase in demand for security systems preserved positive growth. Nonetheless, growth is projected for the coming years.

The growth of the ACS market is associated with the general stabilization of the market situation in the past. Further growth of the ACS market in Russia will be fueled by the spread of new technologies, the emergence of new office and retail space, as well as political and legislative measures to stimulate business during the 2021-2024.

Market segment share has shifted. The segment of middle-class systems has sharply decreased. The share of the budget segment - products with basic functionality and focused on mass demand - has grown. The weight of the premium segment has increased - costly powerful systems with a wide range of capabilities, aimed at a wealthy and demanding consumer. A significant portion of orders are related to large and especially large systems. An increasing number of manufacturers and large distributors offer engineering support to their sales partners. This is because systems have become more complex, and customers are guided by the effects, and not by the presence or absence of a sensor or video camera. Large consumers show no interest in security components. They demonstrate the demand for systems that solve problems. If more expensive components are needed to solve a problem, for example, to lower the cost of ownership or get additional effects from the use of EPS, customers go for such purchases.

Leading Sub-Sectors

Video Surveillance Systems

According to the marketing research agency Discovery Research Group, the volume of the Russian market of cameras for video surveillance (VS) and security in 2019 reached 4.53 million units, against 3.82 million a year earlier (an increase of almost 19%). During this time, deliveries of devices made in Russia increased from 357,155 to 400,796 units. The share of such devices remained practically unchanged - about 9%.

The volume of imports of cameras for video surveillance and security in 2019 amounted to $196 million. The largest share of this figure was occupied by box cameras. Among box cameras, models with a classic appearance are popular. According to Discovery Research, most of the cameras for video surveillance and security in Russia are imported by the following brands: Hiwatch, Dahua, Hikvision, RTI, Trassir, and Axis. The largest volume of imported video surveillance and security cameras to Russia in 2019 came from China, and the largest share of the piece volume of equipment exports from Russia was taken by Dahua.

One of the main trends during the crisis is the pursuit of simple budget solutions. Customer requirements for VS systems are growing, and the barrier to entry for new market entrants is constantly increasing. At the same time, the market receives support at the legislative level (laws on information protection, on personal data, on countering terrorism, industry security standards, etc.), as VS systems become mandatory and regulated.

Key investment projects are ongoing: in the production and transportation of hydrocarbons, in the defense industry, in the segment of urban infrastructure, including the construction of sports facilities in the regions.

Opportunities

· As with any crisis, physical security companies will have the opportunity to adapt to the new reality of COVID-19. For example, contactless access control readers and mobile identification technologies could see rapid growth in demand.

· It is likely that intelligent video analytics can play an important role in maintaining order in the streets, while law enforcement agencies are concerned about compliance with measures to counter the spread of infection.

· One big trend is the provision of security during mass events, as well as the creation of “safe cities.”

· The locomotive of sales growth will be the economy segment (the so-called boxed solutions in all main EPS directions, intended for small wholesale and retail buyers) and premium-class systems.

· In the 2021-2022 perspective, the demand for autonomous or semi-autonomous video surveillance and video analytics systems may increase.

Trade Events

Securika 2020
August 11-14, 2020
Moscow

Sfitex 2020
November 10-12, 2020
Saint Petersburg

Interpolitex
October 20-23, 2020
Moscow

XXVI International Forum of Security & Safety Technologies
February 9-11, 2021
Moscow

Web Resources

Russian news agency “Security Industry”

Ministry of Emergency Situations

U.S. Commercial Service Contact
Yelena Alekseyeva, Commercial Specialist
Phone: +7 (985) 233 87 46

Yelena.Alekseyeva@trade.gov