Zicom is a renowned name in the field of electronic security in India. Could you please tell us about your group, its products and services and also about company's progression so far?
Incorporated in 1994, Zicom is a pioneer and leader in the field of Electronic Security in India. With over Rs.450 crores annual sales, operations in 5 countries, 400 cities in India and over 1 million customers, Zicom is today synonymous with Electronic Security in India.
At Zicom, we don't have the herd mentality, we walk on the path, where other less travel. Our philosophy is not to be a price leader; we are value leaders with our products and services being best in class. Our customers don't buy our products; they buy the power of “Feel Safe.”
In less than two decades, Zicom has established itself as a leader in the security domain, introducing distinct innovations that the rest of the industry has followed. Zicom is the first Indian Electronic Security Systems company that was listed on the Indian Bourses in 1995; Introduced 24x7 Zicom Command Centre (ZCC) in 1995; Introduced wireless security equipment in the home and retail segment; Introduced Security Services called SaaS (Security as a Service) etc.
The company's new initiative, electronic e- SaaS has two business verticals: MYCS and Business Enterprise.
Under its flagship campaign Make Your City Safe (MYCS), it launched electronic security services for housing societies on a nominal monthly service fees. Housing societies can now install electronic security without having to invest or manage; Zicom supplements the Manpower Security in cooperative housing by becoming the Electronic Security Guard.
Under the e – SaaS Enterprise business, it has launched five new services all aimed at Security Resource Planning (SRP) for BSFI, Retail, Educational Institutes, Commercial Complexes, etc.
A couple of years ago, Zicom also launched first of its kind in India the student and vocational education programs in physical security, electronic security and fire safety through its Institute of Advanced Security Training and Management (ASTM) which is now finding its roots deep into a large number of urban and semi-urban centres across the country.
We at Zicom, are focusing on all round growth in fiscal 2014. We are fortunate to have the most admired brand in the electronic security business, hence will retail our products thru multiple retail formats like LFR, Electrical stores, IT stores, etc. We are increasing our sales force for our direct to home business and are on a geographical expansion to increase our partners in our channel business. We have won several good projects in realty and will continue our expansion in this space. Our pioneering of e - SaaS business will be our new growth engine. We will touch around Rs.550 cr group revenue this year and by 2017 will cross the Rs.1000 cr mark.
The Indian electronics safety and security products market is still in its nascent stage. What is the industry size now and what are its growth prospects?
Even though the Indian electronic security is in its nascent stage, one can witness a sea change in people's attitude. With rising disposable incomes and rising incidence of crime and an all-round sense of insecurity in the social scenario people are becoming more conscious about their physical security and hence investing in security products and services. People start with purchase of video door phones and then home alarm systems and then finally graduating to CCTVs. This gives an immense opportunity to a company like Zicom to grow. Though the current market size of electronic security system is Rs.10 billion, it is envisaged to be as large as Rs.22 billion by 2015. In such a scenario, Zicom will reap the harvest enormously.
Traditionally controlled by analog based Surveillance systems, the Indian market is now shifting towards digitized i.e. IP based surveillance systems. How will you compare these two systems and their prospects? Ninety per cent of the security systems are still analog. But we also see a subtle but swift change in the Indian electronic security space. The IP-based services have begun to grow and it is quite evident that both security companies and consumers are moving from the Cave Age of Analog to Cloud Age of security systems and the two cannot be compared. The IP-based Cloud is having an overwhelming impact on analog. Eventually, analog will be wiped out.
Despite emerging newer technologies, consumers still opt for low cost products and services to save on costs. Is this a big challenge for good security products manufacturers?
The consumers do opt for low cost products not because of their buying capacity but because of the unorganized market which looks attractive sometimes for multiple reasons, including their visibility. I must mention here that 80% of low cost security products can be seen in the unorganized market. The bigger reality is that consumers are now shifting towards branded products because they come with good services. A big player like Zicom not only sells/leases its products but also provides technology-led back-up services. So we do not see this as a challenge but an opportunity to further fuel our business.
Zicom has undertaken numerous initiatives towards creating awareness for security products and services in the domestic market. Would you please name few of the initiatives taken by your group?
As more hi-tech security products coming into the market everyday; are these products really affordable at the same time?
Yes, the brand conscious customers will always go for hi-tech security products and services. In time consumers will get products at affordable price points, better service and reach with no bar on a geographical location. As far as Zicom products are concerned, as mentioned earlier, they are easily available at any neighbouring store.
What are the hurdles faced by the industry on its growth trajectory? It seems that the government is still not paying the attention the electronic security industry deserves. What kind of support does the industry expect from the government?
Yes, earlier we used to face hurdles, but now that situation is getting over. There is no looking back for good electronic security products as a large customers base is getting ready for them. Customers see them as a necessity and not as luxury items. Even police officials insist on having security products installed in business centres and housing societies. They help them in detecting any unlawful activity, and make citizens feel safe and secure. The tax and excise is an issue and vary from state to state. But one is hopeful that realizing their importance in public life, the authorities would gradually taper down the taxes.
What is the future of the electronic security systems market in India and how would you sum up the future for your company and its business growth?
As I have mentioned earlier, it will be an industry of Rs.22 billion in the next Two years. And I have no doubt that it will also be a boom time for the electronic security business.
As we at Zicom, pioneered the category of electronic security in 1995, we are now pioneering a new category called e - SaaS which will be our new growth driver. We have experienced early success and by the end of next year, we will be firmly entrenched with major service revenue income coming from this new modelled business.
Alongside its operations within the country, the company has also started looking out for business opportunities to grow its operations overseas. Zicom has acquired 80% economic stake in Unisafe Fire Protection Specialists LLC, Dubai, a leading fire protection company in UAE, in 2007. It acquired business of Phoenix International WLL, the leading fire protection brand of Qatar for $ 15 million in 2012.
It further commenced its overseas operations in Brazil in 2012 through its joint venture company, CIAO-ZICOM Security Systems SA. The JV has been founded with the aim of setting up a comprehensive communication network and surveillance system solution for Brazilian cities. Under the JV, the company intends to set up a manufacturing plant in Brazil.
Zicom's corporate structure includes its subsidiaries such as Zicom Saas, Unisafe Fire Protection Specialists LLC, Dubai; Unisafe Fire Protection Specialists India; Zicom Security Projects; and another company, Unisafe Fire Protection Specialists Singapore.
Zicom now aims to be a world class Indian MNC with its existing presence in five countries as provider of high quality remote managed security services backed by quality products as an enabler.
Our future expansion will be in the fire business in Middle East and security business in Latin America. Both these markets offer us tremendous growth prospects. We recently had some big wins in these markets. In India, we are currently offering our services in over 400 cities, we plan to be present this fiscal by expanding our reach to over 500 cities. We are actively pursuing some potential acquisition in the overseas markets in the foreseen future.
