Reports on how the coronavirus outbreak is affecting supply chains and disrupting manufacturing operations around the world are increasing daily. The most vulnerable companies are those which rely heavily or solely on factories in China for parts and materials.
To date the outbreak has had only a minimal impact on the global video surveillance market; however, the industry still faces a risk from falling demand and a potential production bottleneck spurred by labor and component shortages in China, according to research firm Omdia.
China accounts for approximately 90% of global production of video surveillance cameras, and 45% of worldwide global market revenue in 2019. As a result, any coronavirus-related disruption to production, supply chains or workforces in the country could have a significant impact for a global video surveillance market totaling $19.9 billion in 2019.
“Given China’s status as the world’s largest producer and consumer of video surveillance cameras, the country wields a proportionately massive influence on the global market for these products,” Tommy Zhu, senior analyst, video surveillance, Omdia, states in a press release.
He continues, “Video surveillance equipment suppliers in China currently are contending with reduced production because of a lack of manpower and delays following the Lunar New Year. Meanwhile, domestic demand for general-purpose video surveillance products is likely to cease or suffer delays as the Chinese government focuses on coronavirus control.”
In the best-case scenario, with the epidemic successfully contained by the end of March and the disruptions reduced by April, the impact of the virus on the video surveillance market will be minor. However, if the epidemic continues to spread and infections rise in number in the second quarter, then the effects of the coronavirus on the video surveillance industry and on many other markets will be severe.
