An Inside Look Into Dahua

Dahua is the 'other' billion dollar plus Chinese manufacturer. Large in its own right, just not as huge or as well connected with the Chinese government as its blood rival Hikvision.

Last month, IPVM visited China, including trips to the CPSE show as well as Hikvision and Dahua's HQs.

Dahua has struggled to expand 'overseas' in the past few years. We have followed a string of Dahua's errors, such as: Dahua Attacks Hikvision, Dahua Admits Failed Channel Strategy, The Bizarre Dahua North American Tour, Dahua Massive American Expansion, etc.

We wanted to see Dahua up close, visit their headquarters and better understand their mentality and operations.

Key Findings

Three key findings were clear from our meeting:

• Dahua, like many in the West, believes the market is being destroyed.
• Dahua is paranoid and very cautious/conservative, about Hikvision, about releasing products and about expansion.
• Dahua is technically strong, at a level far beyond any Chinese manufacturer except for Hikvision and similar to Western manufacturers

Inside this note, we examine each of these.

Destroying the Market

Dahua expressed concerns about Hikvision "destroying" the security market, like many both inside and outside China. They cited Hikvision as the main source of price pressure in the domestic Chinese market, not lower cost Shenzhen manufacturers.

They believe recent rapid price drops are not good for the market, and described their philosophy as being "supportive" of the market, instead of aggressive toward it. They believe that this continued downward price pressure is bad for everyone, Hikvision included.

This philosophy seems to be in stark contrast to Hikvision, who continues to lower prices and open up new OEM (ADI's W Box, Anixter/Tri-Ed Northern) and now direct sales channels (Hikvision Launches Direct End User Sales).

Paranoid and Overly Conservative

There were several points in our conversations where Dahua came across as paranoid and overly conservative:

Hikvision Copying?

One point which was repeated in our discussions was that of Hikvision "copying" Dahua. They felt that in several cases they were more innovative, and Hikvision copied. This went all the way back to development of embedded vs. Windows DVRs in the early 2000s, through the development of HDCVI (while Hikvision adopted Techpoint's TVI), and releasing the "first" integrated IR speeddome. Related, a year ago, Dahua essentially accused Hikvision of espionage.

North American Expansion

Throughout our conversations, Dahua was very conservative in their views on expanding North American presence.

We pointed out that the demand is obviously present, with North American users purchasing Dahua from OEMs, as well as unauthorized overseas resellers. They acknowledged this, but maintained that they wanted to do things the "right way", that "it takes time", and were ramping up slowly.

Dahua claims their North American channel will expand in 2016, though would not give details.

Quality/Performance

One of the most puzzling comments in our time with Dahua, they mentioned feeling that their quality was "not quite there" in comparison to historical high end competitors such as Axis. We asked specifically what features they felt were lacking, but they were vague about details.

Given their rapid improvements, now performing similar to or better than competitors, and generally at a lower price point, we found this attitude very conservative.

For example, see our Axis Q1635 test, where Dahua's large imager starlight model performed as well as or better than Axis, Hikvision, and others, at a third the price.

Technically Strong

Dahua is technically strong, far beyond the spam email sellers that many in the West lump them in. We spoke to multiple technical people, including product management, who were knowledgeable, both in concepts as well as the current state of the industry/competitive knowledge.

Dahua's R&D center was quite large, about 40,000 square feet, with well equipped test facilities for image quality, IP ratings, temperature range, vibration, etc. On its roof is a row of dozens of cameras looking over the parking lot and adjacent street, seen here:

Demo Center

Their demo center (which we were not allowed to photograph) included the expected IP and CVI products known to most of the world, essentially the entire Dahua line those in the west may be familiar with.

More interesting, however, were the more complex project-based systems developed for use in China which displayed a greater range of applications, including:

• Parking Guidance [link no longer available]: Parking guidance systems consist of several integrated parts, popular in municipal and large corporate/retail: Digital signs inform drivers of the current free spaces and which direction they are in when entering the garage. Minidomes with multicolored light rings over groups of spaces indicate whether spots are free or occupied, making it easier to locate empty spots. Finally, LPR captures the vehicle's plate from entry through parking, so a user may later enter their plate number and retrieve their parking location if they forget.
• License Plate Recognition [link no longer available]: Dahua offers full license plate recognition systems, with LPR embedded in the camera, reporting to their SmartPSS CMS. Unlike North America, where these systems most often consist of only a camera and IR illuminator, Dahua's (and others) LPR system includes a white light strobe (used to capture driver photos) synchronized with the capture camera, radar speed detection, and other integrated features.
• Body Worn Cameras: Dahua has developed multiple models of body worn cameras, using both local wireless and 4G/LTE, and also integrated to their SmartPSS platform. The target markets for these are not only police, their most common use, but private security and public transit drivers, such as school bus drivers.

All in all, these systems (for the most part domestic only) are much more complex than the low cost products Dahua is known for in the West.

Pictures

We were not allowed to take photos in most of Dahua's facility, including their demo, R&D, and manufacturing facilities. The same was true of Hikvision.

Partly, the reasoning behind this seems to be to protect OEMs. It was not uncommon to see a relabeled camera in R&D or manufacturing areas. All the manufacturers we visited, including a smaller one in Shenzhen, were highly protective of these relationships.

Headquarters

Dahua's headquarters is a high rise building in the Binjiang district of Hangzhou, seen below. Their factory and R&D center are located adjacent (to the left and behind in this photo). Dahua is also building another, larger, factory outside of Hangzhou, to open next year.

The only interior area we were allowed to photograph was the lobby: