The Drone Industry in China with its capital Shenzhen
The Drone Industry in China with its capital Shenzhen
Drones have been attracting global attention for the last several decades. While initially they were primarily seen as tools of the military and tech hobbyists, due to the improvement of drone technology, their commercial, industrial and agricultural applications are now being brought to light. Drones are being utilized in an ever increasing and profitable way.
A drone refers to an unmanned aircraft or ship guided by remote control or onboard computers. Humans have been using drones to complete risky tasks and to reach hazardous places for several decades now. It is expected that the importance of drones and drone solutions will continue to grow. For example, currently the entire world is striving to combat the covid-19 pandemic by carrying out remote transformations.
Quick History of drones
Originally, drones were invented for military purposes such as target practice and air strikes. The early drones were called “pilotless vehicles”, and first appeared during the First World War. Military drones are generally much bigger in size, and are very different from the commercial drones that we usually see today.
As is the case with many military inventions, the idea of using drones for commercial practices emerged. In 2006, the FAA (Federal Aviation Administration in the US) issued the first commercial drone permits, after which companies were allowed to apply for permits to provide non-military drone products and services.
Although commercial use of drones was now allowed, in the beginning commercial drones were still very expensive. The digital revolution changed this. Now, most people have access to smart phones and the Internet. The drone industry took advantage of this opportunity and integrated these new technologies into their products. This made drones easier to use and accessible to more people. Some good examples are the Parrot AR drone, Amazon Prime Air, DJI Mavic 2 Pro, etc. Drones are merging into people’s work and life in all kinds of new and unique ways, bringing some people joy, convenience, and a safer work environment.
Drone industry in China
The drone industry in China is vibrant, full of challenges, and full of opportunities. The history of drones in China is relatively short compared to the rest of the world, however that did not stop China from rising to the very top of the commercial drone market.
History of Drones in China
China started to use drones in the 1950s and started building its’ own drones in 1966. At first China received support from the Soviet Union for building drones, however when they withdrew their support, China started to develop its own drone technology from scratch. During the time period of 1980 to the end of the 20th century, China saw a rapid improvement in military drone technologies.
Consumer drones rose to prominence about a decade later. In 2012, DJI, the leading enterprise in commercial drones, released its S800 drone, kick-starting the consumer drone era. After the launch of the S800 the Chinese consumer drown market grew exponentially. According to the Shenzhen UAV Industry Association, China produced 2.9 million consumer drones in 2017 and the export value of consumer drones of the same year reached 11 billion RMB. Interestingly, 80% of that export value came from one city in China – Shenzhen.
Shenzhen: the Capital of Drones
Shenzhen is the drone capital of China. The top drone companies in China are located in this city. In 2017, Shenzhen had a 30 million RMB output value of drones. One year later in 2018, there were over 360 drone companies competing in the Shenzhen market, producing an annual transaction value of over 40 million RMB. Moreover, advanced drone products were exported to countries all around the world. In fact, made-in-Shenzhen drones can be seen in over 180 countries.
The demand for drone pilots and professionals is yet to be fulfilled, which becomes one of the biggest bottlenecks for the development of the drone industry. Shenzhen have been focused on establishing a competitive talent pool for the entire drone industry.
- In 2015, the Shenzhen UAV Industry Association built the very first drone training center in Shenzhen which allows drone pilots to receive AOPA (Aircraft Owners and Pilots Association of China) training.
- In 2016, DJI also launched its UTC (Unmanned Aerial Systems Training Center), aiming to make Shenzhen the base of exporting drone talents.
- In 2018, a roadmap for the commercial drone industry was released by the Shenzhen Municipal Market and Quality Supervision and Management Committee, mapping out the way forward in terms of becoming a leading drone talent center.
In addition to its strong talent pool, Shenzhen is also known as “the Silicon Valley of Hardware” which allows drone companies to leverage its innovative and powerful hardware ecosystem. “The Capital of Drones” has a friendly and beneficial environment for drone start-ups and enterprises.
Are you interested in knowing more about the drone industry in Shenzhen? We have an office in Shenzhen with experience in working with clients in the drone industry. Feel free to reach out to us at email@example.com, or schedule a meeting here. We will give you initial advice without strings attached and promise to make sure we strive for your business success.
Top Drone Companies in China
Da-Jiang Innovations (DJI)
Shenzhen DJI Technology Co., Ltd. was established in 2006, and as their name implies is headquartered in Shenzhen. With customers in more than 100 countries around the world, DJI is the world’s leading R&D and manufacturer of unmanned aerial vehicle control systems and drone solutions. Currently, DJI possesses 70% of the market capital of the global consumer drone market.
As of 2016, DJI has filed more than 1,500 patent applications worldwide and obtained more than 400 patent authorizations, covering areas including the structural design of various parts of the drone, circuit systems, flight stability, wireless communication, and control systems. DJI was selected as the Global Top 50 by MIT Technology Review in June 2017. Interestingly, the drone models from DJI have appeared in famous TV series such as The Big Bang Theories and Modern Family.
Intellifusion is a company focusing on visual artificial intelligence, and has their headquarters in Shenzhen, China. It is committed to building a “visual intelligence acceleration platform” based on vision chips, deep learning, and big data technologies. Intellifusion aims to serve companies in unmanned systems, robotics and other industries through providing visual intelligence application solutions and development platforms.
On June 17, 2020, Intellifusion was announced as the “artificial intelligence enterprise with outstanding performance fighting against the covid-19 epidemic with scientific and technological support” by the Ministry of Industry and Information Technology.
MMCUAV is also a leading company in the drone industry with their headquarter in Shenzhen, China. The MMCUAV drones are designed to be applied to inspection, public safety, search & rescue, surveying & mapping, and environmental protection. MMCUAV is experienced in serving the power industry, especially by supporting the transmission and transformation construction projects using their advanced drone technologies.
Subsidies for Drone Consumers and Companies in China
According to the “13th Five Year Plan” National Strategic Emerging Industry Plan, the use of agricultural drones is subsidized in targeted pilot regions including Zhejiang, Anhui, Jiangxi, Guangdong, Hunan, and Chongqing. Agricultural drones are mainly used for spraying pesticides in China. By offering subsidy, China is able less the burden of farmers and cooperative in the pilot regions during its smart farming pilot program.
Besides Shenzhen, Chengdu is also an incubator of drone companies. In 2018, Chengdu already had 518 drone companies whose business scopes had covered fields such as aerial survey, fire control, logistics, and security. The Chengdu city government also released an announcement in 2018, encouraging registered drone companies in Chengdu to apply for the “first sale incentive fund” which is a subsidy for companies that developed drone products and achieved the first sale. The subsidy for one drone product should be 10% of the amount on the sales contract, which can be up to 10 million RMB.
Application of Drones
Machines of war
Like a lot of our cutting-edge technology, drones originated from the military. The earliest drone models were radio-controlled pilotless airplanes launched during the First World War.
The Ruston Proctor Aerial Target, the best drone model in 1916, was further developed to be used against German Zeppelins (a type of large and rigid airship) by Great Britain. Another drone model called Kettering Bug was designed as a “Flying Bomb” by the US army. The model was flown successfully, however the war ended before the model could be put into use.
The application of drones in wars is not limited to military strikes. Drones have also been a popular choice when it comes to reconnaissance and surveillance. During the Vietnam War, drones were deployed in a larger scale for reconnaissance purposes for the first time; after the 9-11 terrorist attack, the US increased its use of drones significantly mainly for surveillance.
The remain a controversial and imperfect method of operating in a combat zone, but their military applications have led to large strides in drone technology. The wars forced people to upgrade their drone model and therefore accelerated the development of drone related technologies such as solar-powered drones, setting strong fundamentals for more new drone models to come.
Commercial Use for Businesses
Drones are widely applicable to various businesses and industries. For example, agriculture is vital as the world population increases and agriculture industrializes. Drone technology has been applied to optimizing agriculture operations such as spraying pesticides and monitoring the growth of corps. The market size of agricultural drones worldwide has been increasing stably year by year as shown in the graph below (Statista).
Other than agriculture, drones are also used for industrial inspections, as they are able to reach hazardous workplaces, especially for certain industries such as mining, energy, and maritime. The cameras carried by drones can capture and store visual data for people to better understand and prepare for any existing risks of working onsite in places that may be dangerous. Drones can also be valuable to geo mapping as they are able to explore unknown terrains.
Photography and Videography
It is also common to use drones for photography and videography, as drones can provide helicopter quality shots with ease and the visual content generated by drone cameras are used for wedding videos, real-estate property inspections, as well as movies and advertisements.
Delivery drones can carry lightweight packages which can be up to 15 kilograms. JD.com (also known as “Jingdong”), one of the top e-commerce companies in China, was named the world’s first commercial drone delivery service company by Zipline Inc. In 2020, the JD.com Drone Team managed to deliver supplies to rural areas in Hebei province which were “isolated” because of covid-19 and the surrounding terrains. Amazon also started to explore the future of drone delivery, creating the “Amazon Prime Air” project which is “yet to be materialized.”
Entertainment & Recreation
In May 2019, an amazing drone light show in Tianjin, China stunned the world. The show was consisted of 500 drones and was staged for the opening of the World Intelligence Conference. Drone-based light shows have become popular in China – it is fascinating to watch such magical shows supported by drone technologies.
Drone hobbyists used to be rather exclusive due to the high barriers of entry to flying drones. It was significantly more difficult and expensive in the past, but as the technology improves, the price decreases, and the ease of flight increases, recreational drone flying is accessible to a much larger audience.
Rules and Regulations
The size and agility of drones makes them difficult to detect, especially in urban areas. To prevent safety or privacy threats by drones, setting up corresponding rules and regulations is necessary. In Shenzhen, China, for instance, the Management Rules of Small Unmanned Aerial Vehicle(UAV) (《深圳市民用微轻型无人机管理暂行办法》) took effect in 2019. Below are example of the rules and regulations in Shenzhen.
All drones over 250 grams must be registered with the CAAC (Civil Aviation Administration of China) using the operators’ real names.
No fly zones
As shown in the map below, the red zone is the no-fly zone in Shenzhen. The operators who let their drones into the red zone without permission will need to pay a fine of 1000 RMB.
No-fly Zone in Shenzhen (from DJI)
Discuss your opportunities and plans in the Drone Industry in China!
The application of drones will continue to be an important part of the smart solutions in China and the world. People in industries that involve drone solutions will need to understand how drones are integrated into their businesses and operations. The regulations for drones can vary from country to country, therefore having the knowledge of how to deploy drones properly for commercial purposes is essential. If you would like to know more about the drone market in China, please feel free to contact us at firstname.lastname@example.org, or schedule a meeting here. The 1421 team will be more than happy to provide you with any support you need.
Catherine is originally from Guilin, China, and is now pursuing her business degree at UBC Sauder in Vancouver, Canada. Her passion for consulting and the international business environment in China made her a great fit for 1421’s Shenzhen office as a Consulting Intern in summer 2020. Catherine provides support for various projects of the 1421 offices in Shenzhen, Beijing, and Chengdu. Her experiences of working and studying in both China and Canada have contributed to her professional ability in cross-cultural communication and collaboration.
What happened in the year 1421?
From 1421 to 1423, during the Ming Dynasty of China under Emperor Zhu Di (朱棣) the fleets of Admiral Zheng He (鄭和), commanded by the Chinese captains, discovered Australia, New Zealand, the Americas, Antarctica, the Northeast Passage; and circumnavigated Greenland.
Due to this endeavour we can conclude that “1421 is the year that the Chinese discover the world”.