With 2.78 billion USD in revenues in 2014 and an annual growth rate of more than 60%, Hikvision aspires to become the first-ranked manufacturer of security systems in the world. The company was founded in 2001 and today it has 14,500 employees (5,400 engineers), more than 200 technology partners, 600 patents and 53 offices in China and the world. Thus, Hikvision made sure to be in position to offer to the market its complete, end-to-end security solutions aimed at individual vertical markets
By: Mahir Hodžić
After lengthy flights from all parts of the world, twenty-five nine editorial staff representatives from the security industry of the United States, Russia, China, Germany, France, Turkey, Poland, FinlandSweden, Bosnia and Herzegovina and other countries, gathered together at the invitation of globally renowned company Hikvision. A team representing our magazine found its place among them, which was a great honor for us. The gathering was organized in Shanghai and, on the following day, from there we set out on the trip to the company’s HQ in Hangzhou which is two and half hours away from Shanghai and it served as our place of residence in the next three days. It is interesting to note that these two cities themselves are home to more than 40 million people and that the industrial potential of the region is huge, so it is not surprising that the headquarters of the largest manufacturer of video surveillance systems in the world is located in this region of a large country such as China. The host, particularly its international marketing department team headed by Finn Wu and Ada Han, made great effort to welcome us at the highest level and make it possible for us to use our four-day visit to tour the factory, test laboratories, showroom, head office and booth at the China Public Security Expo (CPSE) trade show in Shenzhen which is dedicated to the security technology.
Current company HQ occupies 68,000 m² and it consists of two towers with 22 floors. However, a new 250,000 m² facility is being built and it will accommodate 11,000 new employees.
The first day of our visit to the Hikvision HQ was marked by a press conference and a lecture during which we were informed about the company’s success and its further steps. It was emphasized that each market is interesting for them and that their presence is adapted to the needs and requirements of individual countries, so that that they do not offer the same treatment to the regions that require either IP or analog technology. The signal of the local market represents the basis of strategic and marketing decisions of the company. Hikvision is a manufacturer that provides complete security solutions with an average annual growth rate of 53% between 2009 and 2014, and with the export business revenues accounting for 26.5% of total turnover, while the share of sales of HD products in these revenues amounted to 75%.
The experience that the company acquired by working on large and demanding projects in the domestic market has become its main export product after their successful implementation. Hikvision established strategic collaboration with leading global companies in specialized sectors for the purpose of joint research and development projects, and these include Intel, Sony, Seagate, WD, Huawei and Apple, and it also established strong partnerships with distributors, system integrators and installers, as well as technology partners such as Milestone, Genetec and other software providers. The popularization of mobile technology and WiFi connection, as well as the ubiquity of intelligent terminals has laid the foundation for the Increasing demand for smart homes affected the increased demand for intelligent terminals, mobile technology and 4G/3G signal transmission. In this respect, this was followed by the development of solutions which would improve the quality of sensors, chipsets, lenses, monitors and signal transmission. Convergence of signals including audio, alarm, video, data, temperature and humidity was achieved by using intelligent technology and, in the future, it will become part of the video surveillance system offer. As it was emphasized, smart applications for buildings, logistics, cities, transportation and housing, along with the processing of large amounts of data through cloud technology, will offer a completely new approach to modern and programmed security systems.
In a specific way, smart city projects accelerate the development of management and control in the field of technology, applications and offered commercial models, and this will facilitate the civil services, city and travel management, and, ultimately, increase public safety.
Industry trends and the company's response
For the second day, the hosts prepared a tour of the showroom, laboratory and company headquarters, and we also visited the factory plant in the afternoon. Company’s showroom features departments in which equipment and systems are presented, so we had an opportunity to get insight into a surveillance center, line of analog products, mobile video surveillance systems for security personnel, smart detection applications, face recognition, motion detection and movement detection, license plate recognition etc. Exhibition area includes overview of smart city solutions, VTM detection of objects and suspicious movements and activities, solutions intended for government agencies and organizations, smart building management, solutions for houses and apartments, cameras for sports, solutions for banks and other vertical markets.
In order to achieve the status of the leading security company in the world, Hikvision Research Institute was founded in 2014 in order to support innovative research and development of new products while taking into account market needs and innovative technology
More than 8% of annual revenues is invested in research and development. The research in this sector focuses on perceptive technology, intelligent technology analysis, data storage, cloud services and multimedia technology.
Continuous innovations led to the release of products such as 4K network cameras (8 MP/12 MP), H.265 cameras and NVRs, Smart 2.0 product line, coding technologies such as H.265+ and H.264 + for better efficiency and usage of bandwidth. With the introduction of CMMI (Capability Maturity Model Integration) model, they sought to improve the management of research and development.
At Hikvision, quality control is a comprehensive process which, apart from design and quality assurance (DQA) which involves more than 500 product testing engineers, also includes the material quality control, monitoring of the production processes and testing and quality checks before market placement.
Laboratory and test centers account for a significant share of the company’s success, so we had the opportunity to visit a laboratory for testing of equipment and departments for testing of sound, human voice and the influence of temperature, audio-video testing laboratory, departments for testing of wireless communication and radio frequency signals. All of these technologies undergo several months of testing after production and before market placement. Equipment and devices undergo tests involving pressure and movement in real-life conditions, so all data collected during tests are exchanged online via software, and the development department gives its final opinion before market distribution.
Growth and only growth...
Entire production output of the companies comes from two production facilities in Hangzhou in the area covering 100,000 m², and from a new 320,000 m² facility in Tonglu. Entire production output is automated by means of SMT (pick-and-place machines) robotic equipment and technology. The company's manufactures more than 90,000 network cameras, 65,000 analog cameras and 5,000 PTZ dome cameras and 28,000 back-end products on daily basis. We had the opportunity to visit two floors at the factory that produces 19 different components. Behavior of employees who usually work with the German-made Siemens machines is regulated according to the 6S (sort, stabilize, cleanliness, comfort, standardization, safety) regulations used by Japanese companies.
Globalization and localization represent the path that the company will take in the future by means of interaction and integration of that which is global and local with unique solutions. The focus of Hikvision’s business will also be its media partners, as the company, in an effort to make society more secure and achieve more success, is aware that in the framework of the development strategy and being on the "front line" of sales and the market, the media can play a major role. By establishment of new branches, increased manufacturing capacity and completed product lines and services, the company will continue to be strongly committed to its core mission - meeting the needs of its partners.