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Industrial and commercial growth and a strict regulatory framework drives the adoption of commercial security

Infrastructural investment, rising risk of perceived threat activities, government mandates, and stringent implementations are leading to increased adoption of commercial security in the Middle East. The integration between the security systems, such as access control and video surveillance, simplify security management and increase cost efficiency. Regulatory bodies in the GCC have laid down strict rules for installation of surveillance cameras for almost all market sectors, along with 180-day video storage.

The Kingdom of Saudi Arabia (KSA) Vision 2030, Dubai Expo 2020, FIFA 2022, stabilisation of oil prices, and economic pickup in the next few years will all play vital roles in growth of the GCC construction industry. Across GCC, the total construction value of projects either in planning or in deliver stage is more than USD $2.7 trillion, according to MEED projects. United Arab Emirates (UAE), Saudi Arabia, and Qatar will experience most developments in the region.

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The Middle East commercial security market is expected to grow at a compound annual growth rate (CAGR) of 16.5% (2017–2022) from USD $2.6 billion in 2017 to USD $5.6 billion in 2022.

Effects of commoditization mitigated by value addition by organised players

The Middle East market is largely unaware of the benefits of many new technologies and security solutions.  End users tend to stick to the minimum, basic security required as per regulations and do not look at security installations as an investment. The major market challenges and restraints are commoditisation, duration of installation process, high cost set up, and lack of awareness. Security market growth is restricted by increasing competition from low-priced Chinese companies, which leads to product commoditisation. Most companies are handling this by providing value-added services that will help differentiate from competitors.

Regulatory framework drives the product market

With increasing tourism and GCC becoming a major business hub, the need for commercial security has increased. As previously stated, GCC regulatory bodies have enacted strict rules for installation of surveillance cameras for almost all market sectors and for 180-day video storage. The regulations specify camera locations, specification details, and parameters for video quality. Irrespective of the size of the facility, installation is a must. It is mandatory for schools in Abu Dhabi to install security cameras. A recent regulation mandates that all buildings with permits to have four or more floors should place at least four surveillance cameras to monitor the interior and exterior areas of the construction site. Failing to abide by these regulations will lead to heavy fines and other penalties. For surveillance, the standard will be about 2 to 3 megapixels with Wide Dynamic Range because of the strong sunlight. Automatic Number Plate Recognition (ANPR) and facial recognition are also usually required for infrastructure projects.

With security requirements becoming more complex, the need for integrated products and solutions has increased. Integration between security systems is a key emerging trend.

Increasingly, most end users are using surveillance for more than just security. Video footage is being used to improve overall operational efficiency of organisations, especially in the hospitality and retail sectors. Customer interactions, store maintenance, and employee supervision are a few of the alternative surveillance uses.

Industrial and commercial market set to drive product segments

eye.gifVideo Surveillance – Video surveillance is growing overall by outpacing the total commercial security market because of the Mega Events to be held and stringent, surveillance-related regulations in the region. The industrial and commercial sectors will hold close to 50% of the share in the total video surveillance market. The video surveillance market is anticipated to grow from USD $1.99 billion in 2017 to USD $4.45 billion in 2022 with a CAGR of 17.4%.

touch.gifAccess Control – Biometric and card reader are the biggest growth sectors in the region. The revenue for access control is expected to increase gradually from USD $0.38 billion in 2017 to USD $0.74 million in 2022 with a CAGR of 14.5%.

ey.gifIntruder Detection – Intruder detection is at the growth stage with the wired segment holding the major share in the Middle East.  Intruder detection systems are more prevalent in the retail and banking and finance segments, making them the main consumers for intruder detection systems (IDS). The market is anticipated to grow from USD $0.24 billion in revenue in 2017 to USD $0.43 billion in 2022 with a CAGR of 12.2%.

Adoption of IP and higher storage requirements are expected to drive the growth of the video surveillance market

Of the total commercial security market in 2017, video surveillance leads with 76% of sales, followed by access control with 15% and IDS with 9%. Industrial and commercial end users are anticipated to dominate the market with 27% and 24% sales, respectively (2017).

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KSA and UAE dominate the market with 31.4% and 24.2%, respectively in 2017

KSA, UAE, and Qatar are strong contributors to the commercial security market in the Middle East. KSA is the largest market with a revenue share of about USD $0.82 billion in 2017, but falling oil prices, reduced government spending, and low investment on infrastructure and monuments will affect the growth rate.   UAE is the second-largest security market due to economic strength coupled with World Expo 2020, UAE’s Vision 2021, and infrastructure development. UAE has adopted stringent surveillance policies to better protect assets and infrastructure because of security concerns. Qatar garnered approximately USD $0.28 billion in revenue in 2017. Qatar’s revenue growth is enhanced by favourable economic conditions and regulatory framework. The surveillance-related regulatory framework in Qatar makes it compulsory for security cameras to have megapixel as a minimum recommended camera resolution and to use an open architecture based on the Internet Protocol (IP) network system.

Key trends shaping the future of the commercial safety market

  • Requirement for a solutions-focused approach rather than a product-centric one
  • The demand for smart storage and high image compression technology will continue to rise.
  • The video surveillance systems segment contributes 76% of the total market revenue. This will continue to hold in the future.
  • Cloud-based access control will be preferred in the commercial segment.
  • With increased complexity of security requirements, integrated and centralised management of security systems on the software layer is gaining importance because it enables customers to manage all security systems on a
  • common platform.
  • Increasing infrastructure investment, government regulations, and a large inflow of non-oil investment trend will act as catalysts for commercial security growth.

Middle East will experience strong adoption of transformational technologies

The Middle East is gearing up for many infrastructure changes and smart city projects. With more than 25 million visitors likely for Expo 2020, high demand for sophisticated security solutions with streamlined integration of video surveillance and access control will be the key emerging trend in this region. There will be high demand for security devices due to the huge volume of commercial development. Increased security will be necessary at religious locations and for the annual Islamic pilgrimage to Mecca. Moreover, the number people in malls, hotels, and amusement parks will increase due to infrastructure development and result in higher demand for security devices.

The security market has been evolving in line with the stringent regulatory framework that defines all aspects from storage requirements to camera specifications. The implementation of different commercial security technology will make traditional and conventional infrastructure more efficient, sustainable, and safe.

Increasing adoption of IP surveillance, video analytics, and smart storage will lead the way for growth in video surveillance systems for the next 6 years. Thus, the Middle East commercial security market is set to experience double-digit over the next few years as regional governments and the private sector look for improved technologies to protect assets and business.

About Frost & Sullivan

Frost & SullivanFor over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion.

About Frost & Sullivan

Frost & Sullivan

For over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion.

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