Russian Federation Security Systems Market in 2024

Russian security systems market continues to grow despite experts` concerns.

The past year presented a challenging environment for the domestic market of security systems, with results that were contrary to initial expectations. Despite expectations of a probable decline due to the departure of a number of serious players, the market demonstrated strong growth, including in new segments. What can we anticipate from the Russian security systems market this year?

Key 2023 results by segment

Russia currently boasts almost 20 thousand industrial enterprises and farms, as well as multiple times more business centres. At the same time, the number of new production facilities, agricultural enterprises and office centres showed an increase in 2023. This was caused, among other things, by increased investment activity. Additionally, some companies sought to expand their production and office space. This has resulted in an increased demand for security systems. As a result, the majority of companies in the security systems market were able to increase their production levels.

Video surveillance. The growth rate of the Russian video surveillance market is slightly lower than that of the global market (6% vs. 9%). However, it is important to consider the impact of its transformation in 2022. It is worth noting that this process is already generally at the final stage. European, Japanese and Taiwanese equipment has been replaced by Chinese and Russian equipment, and domestic software has long since replaced foreign equivalents. The current estimated volume of the Russian market for video surveillance systems is 14 billion rubles. Furthermore, in 2023, Russia was among the world's top three countries in terms of the number of street cameras, with over 23 million units installed.

Information security. By the end of 2023, almost 40% of Russian companies had increased their budgets in this area, resulting in a total market volume of information security systems reaching 252 billion rubles in the previous year. This growing trend can be linked to the increasing number of sophisticated hacker attacks, which are no longer limited to specific companies or authorities. Instead, they are now targeting service providers and vulnerabilities in corporate platforms. Financial organisations, energy companies and various government agencies remain the most protected. There is a growing interest in information protection among retail and marketplaces.

The departure of a number of foreign vendors has undoubtedly had an impact on the Russian information security market. However, the majority of these vendors were able to identify suitable replacements during the 2022-2023 period. It is noteworthy that Russian customers have become more discerning in their selection of solutions for information protection. The most sought-after solutions last year were firewalls, monitoring and response centres, and information and event management systems.

Fire safety systems. The fire safety systems market is expected to grow by over 15% in 2023 compared to 2022, reaching a value of RUB 50 billion. This is due to the intensification of construction, including residential, industrial and new large-scale warehouse complexes, as well as the need to modernise existing systems. It is worth noting that 75% of this market is accounted for by three domestic companies: The leading companies in this market are Argus-Spectr, Rubezh and Bolid.

UAVS. In 2023, the market volume of unmanned aircraft systems in Russia reached 34 billion rubles, representing a 129% increase compared to 2022. At the same time, the civil segment accounted for almost 20 billion rubles, representing a 35% increase compared to 2022. It is noteworthy that the results of a study on the utilisation of purchased UAVs in this segment revealed that 45% of them are employed for security purposes.

It is important to highlight that the use of UAVs, including for security purposes, is facing challenges due to flight restrictions imposed by various regions. In the absence of flight restrictions, it is anticipated that the number of drone applications will grow by at least 15% year on year.

Chinese manufacturers account for approximately three-quarters of the unmanned systems market, with Russian brands ordering products from Chinese enterprises. At the same time, domestic projects that take into account the specifics of the application and meet the demand of the target audience are gradually emerging.

ACCESS CONTROL SYSTEMS. In 2023, the market volume of access control systems approached RUB 15 billion. This represents an increase of over 9% compared to 2022. The majority of these solutions are provided by domestic companies. Parsec, Rubezh Strazh, Vision Labs. In 2023, we observed an interesting trend in the expansion of the product lines of domestic ACS manufacturers, both in terms of technology and software.

PPE. The Social Fund of Russia has estimated that last year, approximately 48 million individuals were employed at domestic enterprises, with 7 million of these employed at harmful and hazardous production facilities. The number of accidents at industrial facilities is approximately 35,000 incidents per year.

In order to reduce injuries and illnesses caused by working conditions, the Russian Social Fund annually allocates significant funds for worker safety. For instance, in 2023, over RUB 21 billion was allocated for these purposes, with approximately RUB 7.7 billion earmarked for the purchase of personal protective equipment. A total of RUB 4.4 billion was allocated for the purchase of protective clothing, while RUB 1.6 billion was earmarked for foot protection.

It is important to consider the relationship between the PPE segment and the labour market. As companies become more active in hiring new personnel, the PPE market demonstrates increased growth.

Trends and forecasts for 2024

General trends. The main trend in the domestic security systems market in 2024 will be the continued introduction of smart solutions. This applies to both integration into a smart building system or a unified security system of an object, and to the use of artificial intelligence, machine learning and other similar tools to improve the efficiency of security systems. Furthermore, smart solutions are applicable to a range of sectors, including ACS, fire safety, video surveillance, and information security, as well as unmanned systems. Furthermore, we can anticipate an increase in the proportion of cloud solutions. This is pertinent to both the video surveillance systems market and the information security systems market. Furthermore, the protection of information in the cloud is becoming increasingly crucial. It is clear that import substitution is an important trend for all segments of the security systems market. This is particularly pertinent for businesses seeking to engage with government customers who have stringent requirements regarding the country of origin of their products.

Video surveillance systems. In 2024, the primary growth drivers for video analytics with AI tools will be economic sectors such as industry, retail, logistics and, of course, the security services market. It is worth noting that Russia is the global leader in the development of systems for predictive and predictive analytics, big data collection, process management and video surveillance systems. These are the areas that have excellent prospects over the next three to five years.

Information security. Over the next three years, the Russian market for information security systems is expected to grow significantly, with a projected increase in volume to 500 billion rubles. Furthermore, the proportion of Russian vendors in the market is set to increase, with expert estimates indicating that they will account for 89% of the total market (or 446 billion rubles) by 2026. The main drivers of this process will be state support and an increase in the number of hacker attacks, as well as the departure of foreign software vendors. The significance of this factor will gradually diminish. In terms of products, the main growth will be provided by complex defence solutions for key industries and the state. A further promising area is the development of affordable yet effective solutions for small and medium-sized businesses.

Fire safety. The latest market forecast from RUBEZH Analytics indicates that the fire safety segment will experience growth of approximately 10-15% by the end of 2024, with some areas reaching 30%. This growth is primarily driven by an increase in the number of new buildings commissioned and major repairs to existing structures. Furthermore, in accordance with GOST R 59638-2021, the maximum service life of fire safety systems is 10 years. This will also impact the volume of production and sales of fire safety solutions.

Passive fire safety systems, including those based on video fire detectors, represent a promising trend in the field of fire safety. These solutions were showcased at industry exhibitions held at the end of 2023 and the beginning of 2024. One of the key advantages of these systems is their ability to be integrated with existing classical fire safety systems, which increases the efficiency of fire prevention and detection.

UAVS. The market volume of unmanned systems for civilian use is expected to exceed 49 billion rubles by the end of 2024, with an estimated value of 97 billion rubles by 2026. It is anticipated that there will be an increase in the purchase of UAVs for both security and applied tasks, including cargo delivery, monitoring and sanitation.

It is worth noting that unmanned aerial vehicle (UAV) defence systems merit separate consideration. In light of the existing challenges, it is anticipated that this segment, comprising electronic warfare, mobile shooters, nets and capes, will grow by at least 40-50% this year.

PPE. It is anticipated that the Russian PPE market will experience a growth rate that is almost twice as high as the global average in the coming years. According to the PPE Association, the Russian market for personal protective equipment is growing at an average annual rate of 13%, compared to 7% for the global market. The main drivers of this growth will be the construction, military-industrial, machine-building, mining and processing industries.

One of the most promising trends in the personal protective equipment (PPE) segment is the development of exoskeletons and exobelts. Provided they are certified, this sector is set for high growth rates in the near future, as such solutions are in high demand in construction, industry and mining.

What are the benefits of taking part in Securika Moscow?

The Russian market for security systems has reached a point of stability and is exhibiting positive growth rates. This presents an opportunity for both domestic and foreign companies to offer their solutions. You can present them to the target audience at Securika Moscow, the International Exhibition of Technical Security Equipment and Equipment for Security and Fire Protection, which is the largest industry event in Russia.

The status of this event demonstrates the high demand from security industry professionals. For instance, in 2024, the exhibition attracted 20,379 unique attendees, 26% of whom were end customers of security systems. Furthermore, 93% of these attendees exerted a direct influence on the decision to purchase products, and 64% held management positions in their companies.

If you are a manufacturer or supplier of technical means of protection and equipment for security and fire protection, then participation in Securika Moscow (Moscow, Crocus Expo IEC, pavilion 3) will allow you to find new partners, customers and expand the geography of sales.