Russia's Security Market

Russia's security industry continues to occupy a notable place on the global market, influencing global trends with its latest technology developments and industry achieveme nts. According to “Russian Security Market Research 2008”, the total value of Russian purchases of security equipment and s ervices exceeded $17bn in 2008.

The threat to property, industrial sites, banks, educational facilities and transportation is rising from all sides. Meanwhile, the technical competency of Russian criminals is growing and terrorist activity continues to be a major concern. These factors, along with a more general rise in concern about securing personal property, have led to a greater interest in preventative measures.

This further promotes the development of the Russian security industry, with principal and fastest growing segments being CCTV, fire safety systems, access control and building management systems.

More than 80% of technical security equipment sales take place in four of the 85 Russian Federation areas: Moscow, the Moscow region, St. Petersburg and the Leningrad region. These regions are known to be well developed, whereas the rest of the Russian Federation are in the process of growth, presenting huge opportunities for international investment.

The number of solid customers of the Electronic Physical Security (EPS) market in Russia is relatively small. Approximately 500 state and corporate customers comprise 80% of EPS purchases in Russia. Of that, the largest industry monopolies constitute about 18 percent of the total supply share. The total number of prominent players in the market (manufacturers, resellers and installers) dealing with technical security systems does not exceed 1,000. A maximum of 20 companies control at least 50% and in some cases 90% of the total volume in each segment of the Russian EPS market.

The Russian security market offers great opportunities to domestic and international investors.

A clear sign of growing incorporation of the Russian security industry into the world market is the presence of Russian research and development and manufacturing companies at the largest industry fairs and exhibitions all over the world. Another sign of growing maturity of the Russian security market is the increasing attendance and participation in Russian security exhibitions by leading international players.

Overall, despite the initial concerns that the financial downturn would heavily affect the security market, majority of the industry players are optimistic as the general consensus is that the weaker companies will be eliminated by the crisis, leaving only those with high-quality products and competitive prices.