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South Africa’s security technology market poised for growth – research

9th February 2024

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The South African security technology market is poised for growth, making it one of the exceptions compared with other industries in the country that are currently facing economic and financial strain.

This is according to recent large-scale research initiated by the Elvey Group on the South African physical security industry, the results of which were presented during a webinar on February 8.

This two-part research project was undertaken last year by independent research agency BMi Research, on behalf of Elvey Group.

The researchers spoke to business owners, senior managers and technical managers in the South African security industry who are responsible for decision-making regarding security technology. Survey questions were compiled through online research and in-depth interviews with industry players.

According to the research, this market’s growth trajectory, compared with others in South Africa, is posited to make the security industry an attractive one to invest in and build.

The overall security technology industry value compound annual growth rate for 2022 to 2028 is estimated at 8.6%.

Factors driving market growth include new technology, particularly around new video technology, including multifocal sensor cameras.

There is also increasing private video surveillance, further driven by the rollout of fibre Internet across the country.

Also, certain systems are starting to see the use of facial recognition software (biometric readers) and artificial intelligence (AI) tools.

Moreover, loadshedding and general power instability causes significant turnover in security equipment that is linked to the national grid. This necessitates the replacement of equipment and allows consumers to source cheaper alternatives, where these are compatible with larger security solutions, the research shows.

The current market value is R5.84-billion, driven by video surveillance which is growing at 9.3% a year. Consistent growth was seen prior to the pandemic, and then again from 2021.

The value of the market, by product type, is R2.81-billion for video surveillance, R1.46-billion for intrusion detection, R1.35-billion for access control and R197.90-million for fire detection.

According to the research, there is greater value in the commercial sector (59%); however, the residential sector has most of the business focus, with the majority of smaller businesses falling in this category (56%).

Several observations from the research indicate a strong bias towards the growing potential of specific security technology within the residential sector.

This includes that solar-powered solutions will grow in popularity, as it is not vulnerable to an unpredictable electricity supply.

Moreover, a wireless alarm system linked to surveillance cameras will be more in demand as wired alarm systems diminish.

Also, video surveillance and related software will be used to monitor properties and people on those properties, as well as for intrusion detection.

Lastly, gate and garage automation will increase.

Meanwhile, the research highlighted several similarities between the residential and commercial sectors in terms of product potential.

This includes that solar-powered solutions, combined with an energy management system, will increase in popularity.

Also, access control continues to be important, with an emphasis on biometric readers and electronic locks.

There is also a continued emphasis on video surveillance and related software.

Further, increasingly, wireless alarm systems will replace wired systems for intrusion detection, and will link to surveillance cameras, thermal cameras and vendor management systems.

There will also be a focus on monitoring the property, people on the property and access, managing risk and supply evidentiary proof.

Mention was also made of deflation (decreases in selling prices) caused by affordable imports entering the local market, as well as developments and improvements in technology leading to further industry deflation.

External worries for South Africans are increasingly about loadshedding (78%) and the struggling economy (80%).

These challenges mean that security companies need to offer solutions that are independent of the power grid, such as products that are solar-powered and battery-run, the research indicates.

It points out that the country’s energy crisis creates a unique challenge or opportunity, with solar-powered systems being a large part of the solution.

Demand in the market is driven by the need for safety, increasing crime levels, technological advancements (including AI), a lack of public funds and, to a lesser degree, cybersecurity.

At this stage, the research shows that physical threats are more pressing than cyberthreats, the research states.

As such, a hybrid approach is predicted – with a blend of on-premise and cloud-based solutions.

Current challenges to adopting cloud solutions are said to be the cost to upgrade security, and a more customised approach.

Notably, 65% of respondents noted that stated automatic updates were a major reason for adopting cloud-based technologies.

The research highlights that current security needs and pain points can be addressed with multi-level security solutions for asset protection, people monitoring and people protection (51%).

Video surveillance is said to create the most value, produce the most sales and drive the only real need.

This is highlighted to present an opportunity for innovation, and it was stressed that it will be important to ensure that video surveillance technology is up to date to remain relevant. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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