Analysis: Latin America Security Market Report shows Argentina and Mexico are biggest markets.
Covering the US, Brazil, Russia, India, China and six Latin American nations, SIA’s International Security Market Reports offer the most comprehensive information on emerging global security markets and the forces influencing their growth. They guide companies looking to enter these high growth markets, and offer valuable information to companies already there
The Latin America Security Market Report provides in-depth analysis of the electronic and physical security markets in Argentina, Chile, Colombia, Mexico, Panama and Venezuela. This comprehensive, one-of-a-kind report examines the demand for security products in each of these high-growth markets as well as each nation’s economy, demographics, infrastructure and legal and tax environment. Findings and forecasts are broken down into economic sectors and equipment segments, enabling businesses to target their resources to areas that have the potential for the biggest return on investment. READ MORE HERE.
This is a Executive Summary of the Latin America Security Market Report.
This study examines the Electronic Physical Security (EPS) market in the countries of Argentina, Chile,
Colombia, Mexico, Panama and Venezuela. The EPS market is comprised of the following segments: Intrusion
Alarm systems, Fire Detection and Alarm systems, Video systems, Access Control systems and Electronic Article
Surveillance (EAS) systems.
The entire Latin American region had a positive economic growth rate in the years prior to the global downturn in
the latter part of 2008. By 2007, the entire Latin American region had completed five years of continuous
economic growth at a rate higher than 4 percent. This growth can be attributed in part to factors such as
improved economic policies and increased trade within Latin America as a result of various trade agreements.
The EPS industry also benefited from the economic performance of the region. This market has been rapidly
expanding within the Latin American countries to meet the growing security needs of their societies.
The total market size of the Latin American EPS market is estimated to be worth USD 704 million for 2008
(considering only the countries under study). Among these countries, Mexico and Argentina are the largest
markets. They account for USD 430 million and USD 84 million respectively, and together represent
approximately 73 percent share of the total EPS market. Colombia (USD 70 million), Venezuela (USD 57 million)
and Chile (USD 45 million) together account for approximately 24.4 percent share of the market. At 2.6 percent,
Panama (USD 18 million) has the smallest share of the Latin American EPS market.
The main driver for the Latin American EPS market has been an increase in crime against property
(burglaries and thefts), which has generated a general feeling of insecurity in the population.
Governmental regulations and public investment are also relevant drivers of this market.
Video systems are by far the largest segment in the EPS market in Latin America with an estimated
market size of USD 263.2 million, representing approximately 37.4 percent share of the EPS market. This
segment has shown the highest growth in recent years and has the maximum growth potential. One of the main
drivers for the demand of video systems has been the migration from analog to digital technology in Latin
America. This trend has led to significant growth rates in the demand of Internet Protocol (IP) cameras in the
market. The main consumers of these devices are the financial and retail sectors. The most common
requirements from these industries for the usage of surveillance systems include, control of internal processes
(such in the case of banks and casinos), prevention of thefts (mostly retail) and public monitoring.
Intrusion alarm systems account for the second largest market share in Latin America. This segment has
a market size of approximately USD 124 million, representing 17.6 percent share of the total EPS market.
Panama and Chile, with 26 and 23 percent respectively, have the highest market share of intrusion alarm
systems. Coincidently, these two countries have the smallest EPS markets in Latin America. Intrusion alarm
systems are the main devices consumed by the residential sector, averaging half of its demand. The demand for
these products has started to decrease in the non- residential segment because they are being replaced by
integrated video systems and access control systems.
The EAS segment is the third largest in the EPS market, with an estimated market size of USD 122.91
million and a 17.4 percent market share; this market is largely driven by demand in Mexico and
Argentina. The demand for EAS systems in Latin America is highly related to the retail industry growth. These
devices have less demand in other industries. There are two major brands supplying the demand for EAS
systems in Latin America.
Fire detection and alarm systems have an estimated market size of USD 111 million, equivalent to a 15.8
percent share of the total EPS market in Latin America. Chile and Venezuela are the countries where these
systems have the highest market share (20 and 18 percent respectively). This market is driven by local
regulations and requirements from insurance companies. Governments approve regulations leading to increased
safety measures in buildings, especially when it comes to workplaces. Insurance companies also require their
clients to implement this kind of risk prevention measure as a requirement to insure their facilities.
The access control system segment has the lowest market share (11.8 percent), with an estimated
market size of USD 82.9 million. In the past few years, these systems have seen great receptivity by
customers. Additionally, the trend toward the integration of security systems has benefited this market since it is
the first security barrier. It is expected that these systems, along with video systems, will experience the highest
growth rates in the coming years. The main consumers of access control systems are the industrial sector as well
as the public sector. These systems are mainly used for security purposes as well as for employees’ control.
In Latin America, approximately 80 percent of the EPS revenues are from the non-residential segment,
which includes the public sector (governments and its institutions) and the private sector (industries such as
retail, tourism, financial services and others). Generally, the public sector requires video systems for public
monitoring. It also generates a demand for access control systems and fire detection and alarm systems for the
security of public facilities. The private sector, on the other hand, uses products from all the EPS categories
under study. The residential sector, which represents the remaining 20 percent, generates demand of mostly
intrusion alarm systems as well as access control systems and video systems in some particular situations. The
products used in this segment generally fall under the low-cost category.
The local production of EPS devices in Latin America is low and is limited to country-specific situations
and focus of manufacturers is on the production of simple and low-cost products. The most relevant case
is Argentina, where the local production of intrusion alarm systems and access control systems represent
approximately 19 percent of the local consumption of EPS products. Venezuela is another example of local
production of fire detection and alarm systems, which represents less than 10 percent of the local consumption
for that country.
Generic Asian products have gained an interesting market share in the Latin American EPS market,
especially in video systems, targeting price-sensitive customers. The lower cost of these devices combined
with the lack of legal quality standards have driven the entrance of these products in the studied market.
Residential and small- and mid-sized enterprises (SMEs) are generally price-sensitive and, therefore are the
main consumers of these products.
Although multi-brand integration is still under-developed, the demand for integrated EPS systems has
gradually increased over the last few years in Latin America. Current integration of EPS products is
generally done with products manufactured by the same company. Integration of multi-brand systems is currently
considered a challenge for the EPS industry in Latin America.
At present, Latin American EPS markets lack regulations related to quality standards and also in terms of
minimum requirement of installed devices. The financial sector is regulated widely in Latin America and there
are some regulations for some of the product categories, for e.g., fire detection and alarm systems in Venezuela
and Chile and video systems for casinos in Chile. However, regulations for these categories are generally not
controlled or enforced effectively.
With respect to the global downturn, economies in Latin America are seeing an impact. The international financial
crisis is cooling down the growth engines in this region, and several parties are expecting growth rates of 2.0–3.8
percent for 2009. The EPS market is also expected to suffer as a result of this crisis but not as much as other
sectors. The industry could have a promising outlook thanks to various government policies and plans to invest in
public security infrastructure. READ MORE HERE.