Chinese drone maker DJI gears up for global expansion – Nikkei Asian Review

BEIJING — Major Chinese drone maker DJI has unveiled a vision for its future as a world-leading technology company with a strong presence in a wide range of high-tech markets.

The Shenzhen, Guangdong Province-based company told its employees at the end of 2019 that its mission was to “become a technology company that continues promoting the progress of the human race.”

Currently, DJI racks up the bulk of its sales in the fast-growing consumer drone market, where it has established a dominant presence. But the manufacturer envisions a more ambitious, diversified future for itself.

At this year’s CES, the annual consumer electronics show held in early January in Las Vegas in the U.S., a DJI subsidiary named Livox Technology, which was born out of an in-house incubation program, showcased a new product based on light detection and ranging (LiDAR) technology, which uses near-infrared light to detect the shape of objects around it.

The product is to be used as a springboard for DJI’s foray into the rapidly expanding and evolving domain of autonomous driving, as LiDAR is viewed as essential to making self-driving cars safe.

DJI’s LiDAR debut heralds the diversification of the company’s business portfolio. With strategic plans to also expand into the drone market for business customers, to which it will be a latecomer, the company is set to face a clutch of powerful rivals.

Hesai Photonics Technology, which supplies technologies and products for Chinese internet powerhouse Baidu’s autonomous driving project, codenamed Apollo, is well ahead of DJI in developing LiDAR systems. Even though DJI’s LiDAR product is less expensive and easier to use than its competitors, the company can ill afford to be complacent about its competitive position in the market.

One major area to which drone technology can be applied is in protecting plants.

XAG, formerly known as XAircraft, is a leading Chinese maker of agricultural drones. While XAG is a cut above DJI in after-sales services and follow-up support by sales staff, DJI appears be ahead of XAG in its technological solutions.

DJI has the technology to protect forests and to prevent citrus fruits from being damaged by insects and diseases. DJI’s drones also beat rival XAG products in terms of reliability and the ability to navigate obstacles.

DJI’s innovation-oriented corporate culture has made the company less attentive than it should be to customer services, which are vital for success in the market for products aimed at business users.

To expand its footprint in the corporate sector, the company needs to develop a special task force to meet the diversified needs of customers in various industries as technological advantage alone will not help it win demanding corporate customers.

Boosting management capabilities is a priority for DJI in 2020, according to company insiders. They say the company will take steps to centralize and more clearly define its business processes as well as management responsibilities and powers.

But the company is keenly aware of the importance of staying ahead of the competition in the crucial consumer drone market.

In 2019, DJI launched mini drones priced under 3,000 yuan ($426) and a new action camera dubbed “Osmo Action,” which costs about the half the amount of popular offerings from U.S. action camera maker GoPro.

Industry analysts predict that DJI will continue with its competitive pricing strategy in the consumer drone market in the coming years.

DJI’s global marketing strategy will be focused on China and Europe in 2021. Most of its sales are made at brick-and-mortar stores. The company plans to ramp up sales by opening more directly operated stores and other sales outlets. It will launch its own stores across China, featuring innovative designs and interactive experiences.

U.S. IT market research company IDC forecasts 10-20% growth in the drone market in North America and Europe. It projects the Chinese market to expand at a brisk rate of 40-50%, with sales of consumer drones seeing 30-40% growth.

With no serious challenger to its dominance in the consumer drone market, DJI is well positioned to reap the benefits from the expected growth of the market by capitalizing on its pricing and cost controls.

36Kr, a Chinese tech news portal founded in Beijing in 2010, has more than 150 million readers worldwide. Nikkei announced a partnership with 36Kr on May 22, 2019.

For the Japanese version of this story, click here.

For the Chinese version, click here.