The first quarter of 2017 is coming to an end, and the security industry has a stagnant pool. Why is that? More than 10 years of hot and windy security industry encountered winter, large enterprises cut prices, medium-sized enterprises pingben shipment, small enterprises are still losing money shipment, what happened to security?

The world economy slowed down in 2016, and the road to global recovery has been bumpy. Commodity prices have continued to fall. But with the recession of economy, the regional contradictions increasingly prominent, the international counter-terrorism form, stability in different countries of equipment demand growth, the global security market is still to maintain a steady growth trend.
Low gross margin will become the new normal of security industry operation.
"The global security industry, including systems integration, has a total production of about $500 billion, which is a large market. The compound growth rate of the global security industry is about 8%, and the combined market growth rate of China's security equipment and integration is between 16% and 18% in 2016-2018. According to the data, the security industry has a big "potential" with a large space and a high growth rate.
"In 2015, the top 500 companies in the us had a profit margin of 9.33 per cent, while the top 500 companies in the us had a profit margin of 3.1 per cent. In recent years, the report of listed companies shows a downward trend in net profit. Based on this data, it can be concluded from different perspectives that the security industry will enter a relatively mature period in the future. The new normal of security industry in the future is the homogenization of products and the reduction of profit margin.
"High growth" and "low margin" this word, seemed to be opposite to security industry, but only from a different perspective, puts forward the multiple features of security industry in the future.
"High growth" means that the future market of this industry has large capacity and customer demand. The main reason for the "low gross margin" is that competition in the industry continues to heat up. This is like a piece of cake bigger, but people will eat more and more, eventually everyone assigned to the cakes are not because the cake is bigger, but because of increased competition, assigned to the same size of the cake before needs more efforts and cost.
The phenomenon of "low gross profit rate" appeared in zhenkongfu anfang, which may have been caused by the price war of anfang enterprises. Past many enterprises gave up the different application industry product segmentation and differentiation, blindly pursue short, flat, fast low standards and low market, low-price competition trying to edge out all their opponents, seizes the market. It was later discovered that the other groups were dying and the next were catching up, and eventually companies realised that attempts to trade profits for market share through a "price war" did not seem to work.
When the "price war" was raging, builders and agents were hurt by unstable prices and imperfect price protection measures. In previous years, the average gross margin for security systems integration projects was 20-22%. Now it's probably only 10 percent or less. Some projects are loss-making in order to develop sustainable technical maintenance and service business market.
With labor costs increase, the capital market "bears", customers and users "dumb money" more time no longer exists, enterprise operating costs continue to increase, management risk is more big, "low gross profit margin" will become the security industry a new normal.
Under the new normal "low gross margin", the enterprise wants to keep a steady development, may be from several dimensions: the first is a horizontal extension product lines, such as monitoring product line rich, from the monitor to the inward and outward, anti-theft, intercom extension; The second is to extend to the industry, from products to solutions, to engineering and operation services. The third is the cross-industry extension. For example, from security monitoring to visual management, from building pair to smart home, from safe city to smart city. The fourth kind is the extension of industry specialization, differentiation and deep cultivation.
Now, almost all industry giant is extension in this a few dimensions simultaneously, and around the needs of customers, products, technology and strategy of the enterprise constantly upgrade, naturally development according to the requirements.
Shenzhen zhenkongfu security co., a manufacturer of the surveillance camera chip module, believes that in addition to the adjustment in product and strategy, enterprises should better provide after-sales service when the gross profit rate is low. In the case of low gross profit, enterprises should ensure that agents and engineers do not increase additional costs after sales, which will not reduce their profits.
"Hope for the best, try your best and prepare for the worst" may be a good attitude towards life. We can also maintain the same attitude towards the security industry. Low gross margin will become the new normal for security industry operation. Are you ready for the worst? Are you ready to respond?

Make a perfect product, maintain the profits in a reasonable area, do the market well, I believe that victory eventually belong to you, although now feel confused, can't see the light, a beautiful day will come soon.