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China’s DJI Targets Agriculture as Consumer Drone Sales Slow

China's DJI Targets Agriculture as Consumer Drone Sales Slow

World leader in sector increases spending on promoting products for spraying pesticides

China’s DJI, the world’s leading commercial drone company, doubled domestic sales of agricultural drones last year and is now increasing spending on promoting its products to Chinese farmers as the consumer market is projected to slow. DJI, which was reportedly valued at $15bn at its latest funding round, and has a 70 per cent share of the global commercial drone market, sold 20,000 agricultural drones for spraying pesticides in China last year, and about 2,000 in Japan and South Korea. That was double the amount it sold in 2017, said Yasha Chen, sales director of the company’s agriculture department. DJI planned to spend more than Rmb20m ($2.98m) to subsidise agricultural sales agents and shops this year, he added. “The cost of market education is very high,” Mr Chen said. “Therefore, DJI takes the initiative to bear part of the cost. We don’t consider profits so far or in the short term.” Sales of commercial drones used for photography made up the bulk of the company’s sales of 375,000 units in 2017, according to consultancy IDC. But the growth of China’s commercial drone market is slowing due to tighter urban flying restrictions. Chinese media reported last year that DJI believed that growth of the global market for consumer drones would slow to below 10 per cent after 2020, while industrial drone sales would continue to double annually.

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DJI has found initial success selling pesticide-spraying drones to state-run Chinese farming companies. Costing about Rmb50,000 to Rmb60,000 each, drones are significantly cheaper than trucks that cost Rmb350,000, and save about 600 tons of rice every year, as “drones don’t get trapped in the land and crush the rice fields”, said Meng Qi, a technician who works on farmland in Binhai county, Jiangsu province, about 400km north of Shanghai. China’s government has said about one-third of the country’s farmland could ultimately be served by drones. The non-military drone industry will grow 40 per cent annually to be worth Rmb60bn in 2020, according to the Chinese technology ministry. But the agricultural drone market is limited by the relatively low incomes of Chinese farmers. “There are some big hurdles for companies — like ensuring there are trained, licensed drone operators, making sure the price of a high-tech farm drone is manageable for rural entrepreneurs or covered by subsidies,” said Even Pay, an analyst at consultancy China Policy.

Shared by: Financial Times

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