Physical Security Market (Updated Version Available)

Key Market Overview:

The Global Physical Security Market Size is expected to reach USD 307.77 Billion by 2030. From its valuation of USD 178.95 Billion in 2022 and is expected to showcase CAGR of 7.4% during the forecast period (2023-2030).

Physical Security Systems are designed to protect establishments and institutions which include residential buildings, commercial offices, factories, warehouses, and others from unauthorized access, thefts, vandalism, fraud, and accidents. The two major parts of a physical security system are physical access control & video surveillance. Physical access control systems include locks, biometrics, smart cards & readers, and other devices. The key objective of physical access control systems (PACS) is to ensure that only authorized personnel are allowed to enter a specific designated area. Video surveillance mainly include analog & IP cameras and recorders. They are majorly used in the monitoring of residential, commercial, and industrial spaces and identifying suspicious activities.
The rising demand for physical security solutions to safeguard servers, networks and data within organizations is spurring the demand for physical security solutions. Technological advancements such as the Internet of Things demands a significant amount of physical security solutions and have thus driven the market growth. Growing organizational awareness and residential awareness owing to rising cases of theft and robberies have propelled the market growth. Physical security solutions restrict the entrance of unauthorized personnel to places with important information and data and hence these solutions are required at every place. The rising demand for physical security solutions from various industries such as manufacturing, retail, BFSI, hospitality is propelling the market growth. Large enterprises depend on physical security solutions to protect their highly critical information. Various solutions such as locks, biometrics, smart cards and readers and others are used to protect sensitive information from unauthorized access. Expanding internet penetration coupled with technological innovations are expected to augment the market growth during the forecast period.

Physical Security Report Coverage:

Report Attributes	Report Details
Study Timeline	2017-2030
Market Size in 2030 (USD Billion)	307.77 Billion
CAGR (2023-2030)	7.4 %
Base Year	2022
By Component	Software, System, and Services
By Enterprise Size	Large Enterprises and SMEs
By Levels of Physical Security	Low Security, Medium Security, and High-Level Security
By End-User	Residential, Commercial and Industrial
By Geography	Asia-Pacific [China, Southeast Asia, India, Japan, Korea, Western Asia] Europe [Germany, UK, France, Italy, Russia, Spain, Netherlands, Turkey] North America [United States, Canada, Mexico] Middle East & Africa [GCC, North Africa, South Africa] South America [Brazil, Argentina, Columbia, Chile, Peru]
Key Players	Honeywell International, Inc., Genetec Inc., Milestone Systems A/S, Axis Communications AB, Pelco Corporation, Robert Bosch GmbH, Cisco Systems, Inc., Johnson Controls International Plc, SECOM Plc, LG CNS, Hangzhou Hikvision Digital Component Co., Ltd., ADT Inc., TELUS Corporation, Senstar Corporation, HID Global, and Hanwha Techwin Co., Ltd.

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Market Dynamics:

Driver:

Rising usage of video surveillance cameras across residential, commercial, and industrial areas
The rising application scope of surveillance cameras in residential complexes, commercial buildings, and other public places to protection of homes & businesses from criminal activities is a key factor driving the physical security market. The surveillance cameras include closed-circuit television cameras (CCTV) or Internet Protocol (IP) cameras. Analog CCTV cameras work on the principle of recording the videos to a digital recorder which further converts the data into digital format. The digital video recorder is connected to a monitor or router through an internal wired network for remote access. On the other hand, digital CCTV cameras, also known as internet protocol (IP) cameras record the videos in digital format which eliminates the need for analog to digital conversion. The footage is captured in higher resolution and the data is transferred over a wireless connection.
According to a data by Comparitech in May 2021, countries such as China, U.S., India, UK, and others comprised the maximum CCTV installations. China consisted of the maximum number of surveilled cities in comparison to other nations globally. Based on the report, there were around 770 million cameras across the globe out of which China had a share of almost 54%.

Restraint:

The installation and maintenance of surveillance cameras and access control systems involve huge costs which is a potential factor restraining the market growth. Major organizations, mainly belonging to the small & medium level enterprises which are not economically strong may not have the required budget to install physical security systems on their premises. Additionally, the installation of physical security systems requires a significant infrastructure and power supply which might not be feasible in certain locations. Moreover, privacy concerns among people is another major factor which restricts the application of surveillance & monitoring systems in residential areas. Especially in developing and underdeveloped countries where there are no strict regulations regarding the installation of surveillance systems, owing to which they are not used in residential places despite security concerns. This is a major factor restraining the market growth of physical security systems.

Opportunities:

Rising urban development programs in the form of smart cities across the globe is a key factor expected to drive the physical security market in the future. Smart cities integrate urban infrastructure and service delivery by leveraging data & Component for providing solutions to achieve a citizen centric approach. One of the major elements of smart city is digital transformation which includes security & privacy and connectivity. For instance, according to a report by Singapore Global Center in collaboration with the United Nations Development Program (UNDP), around 70% of the global population would be residing in urban areas by 2050. Regions across Asia & Africa (China, India, & Nigeria) would witness urbanization coupled with increase in the number of megacities & small urban settlements.

Physical Security Market Competitive Landscape:

The competitive landscape of the Physical Security Market industry was analyzed thoroughly. Continuous technological advancements and research are propelling this market growth. It was found that large investments were regularly made in new product development. Moreover, financial data such as revenue breakup, sales breakup, and major companies competitive MOATs all have been detailed in this report.
The major players in this market: -

• Honeywell International, Inc.
• Genetec Inc.
• Axis Communications AB
• Milestone Systems A/S
• Pelco Corporation
• Robert Bosch GmbH
• Cisco Systems, Inc.
• Johnson Controls
• SECOM Plc
• LG CNS
• Hangzhou Hikvision Digital Component Co., Ltd.
• ADT Inc.
• TELUS Corporation
• Senstar Corporation
• HID Global (ASSA ABLOY)
• Hanwha Techwin Co., Ltd.

Recent Developments:

• In April 2022, Johnson Controls International Plc acquired SES to expand the access control to critical infrastructure. This acquisition enabled Johnson Controls International Plc to offer keyless access control and data analytics to efficiently protect specialized high-value, critical infrastructure. Furthermore, SES integration of mobile, cloud and on-premises Component offer a complete solution for multi-site security.

• In March 2022, Axis Communications AB launched the AXIS M5000-G PTZ Network Camera. It is a multidirectional 15 MP camera offering total situational awareness of indoor areas up to 400 m2 (4300 ft2). It has three 5 MP sensors and one PTZ camera with 10x optical zoom and HDTV 1080p, and it delivers sweeping overviews and zoomed-in details.

• In December 2021, Honeywell International, Inc. acquired US Digital Designs, Inc. The acquisition helped the company to expand its public safety communications capabilities. Moreover, this also helped Honeywell to extend its product portfolio.

• In July 2021, Bosch Security Systems launched AVIOTEC IP starlight 8000 AI-powered IP camera for enhanced fire & smoke detection. These cameras could be installed at paper mills, airports, industries, and many other locations.

Physical Security Market Segmentation:



By Component:

By Component, Physical Security is segmented into Software, System, and Services. The system accounted for largest market share in 2022. Physical security systems involve the use of multiple layers of interdependent systems for security and safety purposes that are monitored by the user. According to the report published by World Population Review, approximately 70% of the total burglaries are house break-ins. This has resulted in a growing demand for surveillance systems. Consequently, there are a large number of suppliers providing security systems such as surveillance cameras and biometric systems at a much cheaper rate compared to the market price. This is one of the major factors contributing to market growth.
The services segment is estimated to showcase the fastest CAGR in the forecasted period. Physical security services are a form of protective security by providing a secure environment by preventing unauthorized access monitored by official resources. Government agencies have invested in multiple physical security services such as remote monitoring services, security system integration services among others. Increasing demand for real-time surveillance data across commercial sectors is creating an optimistic growth prospect for the market. According to the report Statista, the global e-commerce sales grew by 17.1% as compared to 2020. Likewise, the surge in online purchasing on e-commerce sites, during the Covid-19 pandemic resulted in boost in demand for more warehouses. Hence, this has also resulted in an increased need for physical security services.

By Enterprise Size:

By Enterprise Size Physical Security is divided mainly into Large Enterprises and SMEs. The Large Enterprises segment dominated market share by revenue in the year 2022. These organizations use security systems to prevent both physical and digital intrusion. Access control systems ensure that only the authorized people such as employees and staff enter the organization. In addition to this, network cameras, mostly IP cameras, are extensively used in the premises. The daily activities are continuously covered and recorded to be regularly monitored.
The SMEs segment is estimated to grow with the fastest CAGR during the forecasted period. Controlling physical access to restricted areas in the workplace is one of the major factors for adoption of physical security systems. Increased need for burglar alarms, video surveillance, access control systems and fire protection in small offices or retail spaces has increased. SMEs include retail, restaurants, commercial buildings, and others. A large share of the world\'s population works for an SME, which account for 60%-70% of employment in most countries. However, many of the SMEs face traditional problems such as exploitation of data, intruders, and lack of security. This is another significant factor for the rise in demand for physical security systems and services in cross the segment.

By Levels of Physical Security:

By Levels of Physical Security segment is categorized into Low Security, Medium Security, and High-Level Security. The Medium Security segment accounted for largest market share in 2022. Based on levels of physical security, medium security devices are ideal for SMEs, malls, warehouses, and similar other settings. Medium level security devices obstruct, detect, and evaluate unauthorized activities. Devices such as alarm systems with loud sirens and remote monitoring, high fences are used to cover internal and external threats. Access control systems and services are used in malls to avoid shoplifting in shopping malls and retail shops.
Further, the Low Security is estimated to showcase fastest CAGR over the forecasted period. On the basis of levels of physical security, low security devices are ideal for residential purposes. Security systems are popularly installed to monitor the external environment. However, this is only necessary in independent houses or houses of large area premises. Protection from burglary and theft is a driving factor for market development. According to a report published by Statista, there were approximately 336 million households with smart security cameras worldwide, in 2021.

By End-User:

Based on End-User the Physical Security market is divided into residential, commercial, and industrial. The Industrial segment held a dominating market share in 2022. All factory owners, despite the size of their facility and the complexity of the operations, are working towards providing a safe environment for their employees. The increase in awareness towards adopting a secure space in factories and manufacturing plants protect the external areas is one of the key factors for market development. There are various activities that need to be monitored such as visitor access, intrusions, and break-ins among others. PTZ cameras are used to monitor a large area from a single point.
The Residential segment is estimated to grow with the fastest CAGR in the forecasted period. The residential segment includes individual customers who purchase physical security systems and services for their personal consumption. Rising consumption of access control devices such as CCTVs, video doorbells, digital door locks and similar devices is a key factor expected to drive the physical security market across the residential end-user segment. Factors such as economic growth, growing awareness, and constant advancing Component in surveillance products are likely to boost the growth of the market for residential security.

By Region:

The North America region dominated Physical Security Market in the year 2022, owing to rising adoption of physical security solutions in critical infrastructures such as hospitality, manufacturing, BFSI, nuclear plants and several other industries. Additionally, rising investments by small and medium sized enterprises in physical security solutions coupled with economic growth and regulatory reforms have positively impacted the market for physical security. Moreover, several transportation systems and public facilities such as railways, airports, bus stations are focusing on preserving their infrastructure through physical security solutions, thus propelling the market growth.



Further, Asia Pacific is anticipated to showcase the fastest growth over the forecasted period. The growth in Asia Pacific region can be attributed to the rise in investments by government bodies for smart city projects, growth in industries such as BFSI, transportation, hospitality and rise in demand for video surveillance products to track movement of people. The outbreak of COVID-19 pandemic propelled demand for cameras in developed economies of the region to monitor patients under quarantine. Rise in awareness of automated security solutions such as intrusion detection, door locking, fire detection systems by organisations as well as households created a huge impact on the market.