The increasing acceptance of closed circuit television (CCTV), decreasing prices of camera components, advancement in technology and newer applications are some of the factors driving the demand for video surveillance cameras in China, reports Frost & Sullivan.

In the future too, as long as the need for security and surveillance remains, opportunities for CCTV systems will exist.

New analysis from the consulting firm, Chinese Video Surveillance Camera Markets, finds that the market earned revenues of $213.8 million in 2006 and estimates this to reach $484.3 million in 2013.

"Technological improvements are leading to newer features that make the cameras more beneficial for end users," remarks Frost & Sullivan Research Analyst David Ren. "In addition, new applications which include baby care; aged care, plug-and-play CCTV systems, and shop care are contributing to high demand in the market."

Given the increasing security threats, there is a simultaneous rise in the awareness of CCTV products, which is translating into greater demand for CCTV cameras.

Despite these positive trends, the level of competition in the market is very high, thereby affecting the margins of manufacturers. In this situation, manufacturers are introducing attractive features such as price-offs, money-back guarantees, free trials, and bundled product offerings to boost sales volumes.

Another factor affecting the growth of the market is the high dependency of camera manufacturers on big suppliers for chips and sensors. As a result, their production capacity utilization depends on supplies from these companies, which can act as a deterrent to market growth.

From the demand perspective, the market requires solutions instead of products. Hence, companies whose core competency lies in one product market need to acquire competencies in other aspects of the value chain. This can be done through backward and forward integration.

"Manufacturers that plan to enter a new market need to be familiar with the standards prevalent in order to be able to produce and sell in a standardized environment," says Ren. "Hence, substantial investments in R&D will become necessary."

In addition, manufacturers would do well to identify gatekeepers and influencers as well as the people who will test, install, and operate the systems. Improving technological capabilities and dealer relationships will also prove beneficial.

Chinese Video Surveillance Camera Markets is part of the Automatic Identification & Security Growth Partnership Service Program.