China’s consumer drone makers shift focus to commercial sector for growth
The market for consumer drones is still there, but for most Chinese manufacturers the competitive situation is getting tougher as there’s little room left given the domination of brands like DJI
Although demand for consumer drones is still expanding globally, an increasing number of Chinese drone makers are feeling the heat in both the retail and capital markets, prompting many to shift their focus to the commercial sector.
The market for consumer drones is still there, but for most Chinese manufacturers the competitive situation is getting tougher as there’s little room left given the domination of brands like DJI, said Zeng Xiangfeng, a sales manager from Shenzhen Aero Sunfly Co.
“Shenzhen had about 300 drone brands in 2016, and 20 per cent of them exited the market last year. The consumer drone market is dominated by DJI and barely any of these drone manufacturers in Shenzhen raised new capital last year,” Zeng told the South China Morning Post.
Shenzhen is home to the majority of Chinese drone makers, accounting for more than 70 per cent of global shipments of unmanned aerial vehicles (UAVs) – commonly known as drones. The city’s customs data showed that the value of drone exports soared 76.9 per cent to reach 5.47 billion yuan (US$796.5 million) in 2016.
Meanwhile, Shenzhen-based DJI, the world’s largest consumer drone manufacturer, said its revenue in 2016 surged 60 per cent to 10 billion yuan, of which 80 per cent was from overseas sales.
However, CB Insights data indicates the drone industry is losing its shine as there was only US$55 million in venture capital invested in eight drone industry deals in the third quarter of 2016, a sharp decrease from the almost US$106 million and 13 deals in the previous quarter, and US$134 million in 12 drone-related companies in the same period a year ago.