The Next Big Thing

Drone maker DJI’s success inspires hundreds of Chinese start-ups to try and fly high

PUBLISHED : Thursday, 14 May, 2015, 7:02am
UPDATED : Monday, 01 June, 2015, 12:00pm

John Ma and two friends arrived in the southern Chinese city of Shenzhen last July with a dream. Four months later they had produced 70 small drones and put them on sale on retail platform Taobao.com at 468 yuan (US$75) each.

Ma’s venture, and hundreds of others like it, have been lured to Shenzhen by the runaway success of drone maker DJI Technology, which has gone from start-up in 2006 to the world’s No 1 maker of the devices in less than a decade.

“DJI inspires many Chinese with talent in technology. If it could grow from 50 employees to 1,500 in three years and from three million to 3 billion yuan (sales), then maybe so can we,” said Ma, a 22-year old graduate student, referring to rapid business expansion and sales growth of DJI in recent years. 

There’s no official statistics but industry insiders estimate that several hundred companies are trying to emulate DJI in the consumer and small commercial drones market. On the official websites of many of these companies, they all say they are aiming at being next leading brand in the industry.

They have a way to go. DJI now has a 70 per cent share of the global civilian drone market and is also one of the world’s most valuable start-ups, with some estimates putting it at a valuation of as high as US$10 billion.

But the market is on the side of the newcomers. The US-based Consumer Electronics Association forecasts the global market for consumer drones will approach US$300 million by 2018.

And they will be helped, as DJI was, by the abundance of cheap manufacturing plants in Shenzhen, China’s hardware hub that was once dubbed “the world’s workshop”.

That’s a boon to small start-ups: Ma’s venture only spent 20,000 yuan to produce his drones. He said the city was a heaven for grassroots hardware innovators, combining all aspects of the supply chain as well as design and manufacturing processes in one place.

“It’s easy to find hardware factories to turn your idea into products, no matter if you only have just a few thousand yuan or just order one unit.” Ma said.

Also making use of the Shenzhen advantage is ZeroTech (Shenzhen), maker of the Xplorer quadcopter series that sells at 4,999 yuan, taking on DJI’s Phantom 2 that costs about 6,000 yuan.

“Besides Zero, there are about 100 companies targeting DJI, 80 per cent of them based in Shenzhen,” said ZeroTech’s co-founder Deng Qiuwei, who is also deputy general manager of Shenzhen Rapoo Technology Company, one of the world’s biggest mouse and keyboard makers.

He said the Xplorer has all functions that Phantom 2 offers but with some added features such as a built-in Wi-Fi extender and powerful battery and a better hovering and rotating capability.

Deng estimated he could sell about 20,000 Xplorers across the world this year.

“We will make use of our 85 mouse and keyboard distributors in 67 countries to promote the drones. A single client in Europe ordered 1,000 Xplorers in February.”

He sees a big market, with uses in areas such as security surveillance, film and entertainment, logistics and agriculture.

Ma meanwhile said that many drone start-ups in Shenzhen are looking to develop the low-end market in the mainland by making more affordable models, leaving the high-end market to DJI and others like Zero.

“Our next step is to add a pinhole camera to our toy drone and make the image synchronize on smartphones,” he said, adding that the drone could hover just above the user’s head.

“That would be a really cool way to replace selfie sticks,” he said.