Zicom is a leading Electronic Security Systems (ESS) provider in India, with offices in over 30 cities and towns, employing over 400 people. In the past, ESS were seen as complex and expensive system. But today, the establishment of Zicom has led to a new breed of simple, user-friendly, and affordable ESS.
In the latest series of Movers & Shakers interviews, Frost & Sullivan's Deputy Director for Automation and Electronics group, Mr. Niju.V (NV) speaks with Mr. Pramoud Rao (PVR), Managing Director, Zicom Electronic Security Systems Ltd.
NV: Could you share with us the reasons for your transformation from being an IT peripheral solutions provider to an Electronic Security Solutions provider?
PVR: It all began when I was working in the office automation domain where we used to sell copiers, coffee/ tea vending machines, fax machines, and cordless phones. I quit the company in 1994 and joined a similar business of office automation where we used to primarily focus on the telecommunication segment, selling three main products, namely, modems, pagers, and mobile phones. We continued for one year in the same business line, till a diagnosis that we did, revealed that we were likely to be extinct and forgotten in the coming years considering the dynamism of the trading business, market changes, and the inherent property of the short product life cycle involved in the business.
Therefore, we took a leap ahead, looking for a new business opportunity, and that is how we got into Electronics Security in the year 1995. Some of the reasons for stepping into this industry were:
- Since we are in the era of globalization and liberalization, India was expected to continue to witness a huge entry of Multinational companies (MNCs), which have always given priority attention to security elements concerning their business.
- The research we did in the banking sector revealed that they were not aware of security systems but were certainly in need of them.
- The emergence of the Y2K syndrome is likely to lead to a demand for Electronic Security from the IT companies holding huge potential at the international level.
NV: When you started your business in 1994-1995, a layman's knowledge of security must have been very less and unfortunately the Government had never focused on security measures either. Apart from the business that could be expected to transpire from MNCs, the other opportunities in terms of business volumes are likely to have seemed very less back then. In such a scenario, what inspired you to get into this business?
PVR: We were first generation entrepreneurs with very little cash in hand then. So, we went public, thanks to our investors who showed interest in us. It is a fact that people hardly knew what we were, who we were, and what our business was all about. Some mistook us for a Securities Company dealing with stocks and shares while some others thought we were a manpower security agency. Electronic security was a new term then and was in the introductory stage. In fact, I feel the scenario has not changed much even today, in spite of India having witnessed 12 major bomb blasts in the past 7 years.
Political parties claim that they would give topmost priority to security. A good example to show that it is not yet on their priority list would be the Indian Premier League walking out of the country without any serious security measures. The market is still quite small, with the Electronics Security market standing at INR 1500 Crore. It is evident that India lags in security measures from the number of human lives that are lost everyday due to security lapse. Yet, the demand for security has not grown. I feel the size should have grown to at least INR 15,000 Crore after 26/11. When we did a research to bring out the reasons for the lack of interest, what we saw was a huge battle to fight. The challenges are numerous. May be the resistance level of people have slightly come down, but the challenges are yet to be overcome.
NV: Taking into account the major blasts that have happened in the recent times, has your business observed a spur in growth? Have people shown a sudden interest in the security systems market?
PVR: If we look at the DNA of our country, we are very reactive. If a blast occurs today, we talk about the issue for a couple of weeks expressing anger and fear but it all fades in the next couple of weeks. The case was best demonstrated by the 26/11 attacks. I don't think the policemen are any better equipped today. No technology implementations for preventing such attacks have been done; neither has the Government done anything to improvise the security system. The situation is like that of the Railways in the Mumbai suburbs, where many people lose their lives everyday and no measures are been taken to prevent it. Therefore, the concept must be percolated to the grassroots ? students across educational institutions must be educated about it and people should be made to realize that 'security' is a necessity for living. It is ironical that a man who boasts about possessing a LCD TV or other hi-tech electrical and electronic home appliances gives security system the least priority. It is high time that the country becomes 'security conscious' in order to fight the security threat.
NV: Is Zicom doing anything specific to create awareness?
PVR: We did think about it, as creating awareness is crucial for our business to take off. To create and spread awareness, we invested around INR 30 Crore but the outcome was mixed. It was probably difficult to sell 100 panels earlier, but now 1000 panels can be sold with less effort. However, the price we paid for it is huge. As I said, security must be made to be felt as a basic necessity and one must accept to have it installed at home. Once the dependence on it at home arises, then the need for having it wherever one travels arises, and that is how this market can be expected to grow. This is how the market has grown internationally but not in India. The home market size of INR 5