Flying High

Chinese drone maker DJI to enter brick and mortar retail in Asia

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Shenzhen-based civilian drone maker DJI is making a major foray into physical retail as it opened its first brick-and-mortar shop in Hong Kong on Saturday. The three-story flagship store in Causeway Bay is the third location in Asia to have opened in recent months.

The 10,000-square-foot shop came on the heels of two similar flagships – in Shenzhen and Seoul – which opened in December and in March respectively.

A company’s spokesperson said that the stores fulfill a purpose more than selling. They are also a technical support center, and a rally point for technology enthusiasts to experience flying a drone.

“Each location was strategically planned,” said Kevin On Chin-hang, DJI’s associate director of communication in Asia Pacific, adding that global market expansion is part of the company’s strategic development plan.

“If you look at Asia, excluding China, which is a big region on its own, the three key markets: Japan, Hong Kong and [South] Korea are definitely on the top of our list. That’s why we are making investments in infrastructures.”

The company will open more physical retail locations, but nothing plan can be confirmed at this stage.

DJI primarily relies on online sales and third-party retailers to reach customers worldwide.

In Hong Kong, phone maker Apple and electronics shops, such as Broadway and Fortress, are some examples of DJI’s local retail partners.

The new shop in Hong Kong carries a full range of products, from gimbals to consumer and industrial drones. The latest products are Osmo Mobile (HK$2,299), a smartphone gimbal released earlier this month, and Phantom 4 (HK$9,299), a drone released in March.

Osmo Mobile is paired with an Android or iOS phone to shoot high quality video footage. The device uses a bluetooth connection, instead of wi-fi, so it frees up bandwidth for live streaming.

Phantom 4 is billed as an “intelligent flying camera.” The quadcopter can shoot 4K video footage, and uses a location tracking algorithm that fuses data provided by object recognition and GPS positioning.

It has two tiny cameras on the front to detect colors, patterns and shapes. The two cameras make functions not available on older Phantom models possible, and ensure a higher degree of safety and ease of use.

“There are three key features that are probably a first in the consumer drone industry,” said On. “When the drone sees an obstacle, it will stop or fly over it. This is a key breakthrough in consumer technology.”

The TapFly feature allows users to direct the drone to fly in a particular direction, while the Active Track feature follows a person or an object based on the images captured by the two tiny cameras.

DJI was founded in 2006 by Frank Wang Tao, a graduate of the Hong Kong University of Science and Technology. The private company is the world’s biggest consumer drone maker by revenue. Market research firm Frost & Sullivan estimates that DJI has a 70 percent market share.

DJI has not disclosed its latest financials. But in an interview with Wang last year, Forbes reported that DJI sold about 400,000 drones in 2014, and was on track to reach a sales target of US$1 billion (HK$7.8 billion). The majority of the units sold were the company’s signature Phantom model.

In May 2015, the company raised a new round of investor funding worth US$75 million. That gave DJI a valuation of US$10 billion. Market analyst ABI Research forecasts shipments of consumer unmanned aerial vehicle to exceed 90 million units, and generate US$4.6 billion in revenue by 2025.

Despite its current leadership position, DJI is facing strong competition in an increasingly fragmented consumer market. Apart from rival French company Parrot, action camera maker GoPro also entered the fray, debuting its first drone in the United States last week.

The article first appeared in the Standard on September 26, 2016.

Can You Afford UK Uni?

The 25 cheapest university cities for students in the UK

Edinburgh University Old College Quad quad, after refurbishment.

Portsmouth is the most affordable city across the United Kingdom for students to live in, while Edinburgh gets you the worst bang for you buck, a report on student living standards commissioned by the Royal Bank of Scotland finds.

Students in Portsmouth pay slightly more rent than the national weekly average of £109, but they have the biggest disposable income of £182.64 a week.

The majority of a student’s income comes from bank loans, which on average are £161.14 per week. It’s roughly four times larger than the second-largest income source, which is parental support.

Another common way for students to generate income is by working part- time.

“Portsmouth students are topping up their term-time income by working around 25 percent more hours in part- time jobs,” the report says. “However, students there still have time to socialize, given they are ranked as the third most sociable place to study.”

Students in Manchester and Belfast work the most hours part-time, and therefore spend the least time on hobbies and socializing.

Those in Cambridge and Oxford spend the most time on academic studies in comparison to other regions, according to the report.

Liverpool and Newcastle claim the second and third spot on the affordability scale.

In contrast, Edinburgh is found to be the most expensive city for students due to average rent costs combined with significantly lower than average term- time income, the report says.

Students in Edinburgh fork out an average of £112.05 a week on rent, and have £179.49 a week at their disposal. They earn less than their peers in Portsmouth, although they clock similar work hours each week.

“Despite this, Edinburgh students spend the most on going out, and spend more than the weekly average on alcohol,” the report adds. Edinburgh students estimate that they spend around £15.40 on drinking.

On rental expenditure, students in Oxford and Cambridge pay the most, at £135.38 and £131.48 per week respectively.

Students in London are paying below the national average for rent at £105.08.

On choosing their destination for further studies, only 5 percent of the students surveyed say the cost of living and university fees would affect their decision.

Subject choice is their leading factor of consideration, followed by the reputation of a university.

However, one in two students say managing their finances is stressful.And one in three students do not have a budget when it comes to managing their money.

The Student Living Index by NatWest bank – which is part of the RBS group – surveyed 2,514 students across the UK in June to determine the most affordable place to study.

The survey takes into account a range of factors, from how much students spend on going out to how much time they spend studying.

The full list of the top 25 most cost-effective cities for students in the UK was: (1) Portsmouth, (2) Liverpool, (3) Newcastle, (4) Belfast, (5) Exeter, (6) York, (7) Cardiff, (8) Nottingham, (9) Birmingham, (10) Dundee, (11) Manchester, (12) Norwich, (13) Leicester, (14) Brighton, (15) Reading, (16) Glasgow, (17) Leeds, (18) Bristol, (19) London, (20) Sheffield, (21) Plymouth, (22) Oxford, (23) Cambridge, (24) Southampton, and (25) Edinburgh.

The article first appeared in the Standard on September 13, 2016.

Idol Chatter

A chief executive who’s expanding on his boyhood hero’s vision

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Many boys grow up worshipping action heroes. Frederic Charles’ boyhood hero was a pharmacist named Pierre Fabre.

“Fabre was highly respected in my hometown as a man and as a businessman,” said Charles, who’s from Cahors, a neighboring town of Castres where Fabre came from and where he started a pharmacy.

“When I was a baby, I was using products for babies. In Midi-Pyrenees, Fabre was the second private employer after Airbus. So he was always very established.”

Charles, who was born into a family of pharmacists, met Fabre as a boy through family connections. Fabre’s business visions and beliefs impressed young Charles.

Fabre, who passed away in 2013, was an inventor of medical beauty products. Since he set up his pharmaceutical company in 1962, Fabre came up with safe and effective cosmetic products which he subjected to the same vigorous standards of drug manufacturing.

Pierre Fabre Laboratories, the second-largest independent pharmaceutical group in France now generates more than two billion euros (HK$17.29 billion) in annual sales. It is engaged in drugs, health products and dermocosmetics.

Dermocosmetics, comprising 10 prominent brands such as Eau Thermale Avene, are the largest profit contributor. Pierre Fabre Laboratories holds more than 50 percent share of the world market.

This business is also a fast-growing category for competing companies, such as Bioderma Laboratories and The L’Oreal Group, which owns Vichy and La Roche-Posay.

On a personal level, Fabre was a humanist. He was always close and faithful to his friends and each one of his staff. Charles recalls: “The group has more than 10,000 employees but he always knew each one by their names.”

Knowing that Charles wanted to read business, Fabre advised him to choose the right business school, and proposed an internship at his company’s new subsidiary in Japan. Fabre had just started a joint venture with the family that founded Shiseido.

“I was 18 then. It was my first time in Asia,” recalls Charles. “When we visited a Shiseido factory, the marketing director was there to welcome us. For someone preparing to enter business school, it was an impressive life experience.”

“Shiseido played a big part in promoting Eau Thermale Avene. Created in 1990, it achieved commercial success in two years. We were the only one to do that in Japan.”

After business school and a brief stint in film production and finance, Charles joined Pierre Fabre Laboratories in 2000. Now chief executive of Pierre Fabre Dermo-Cosmetique in Hong Kong and Macau, he is no stranger to the SAR as he has travelled here for business. He had also started his own local trading company during a sabbatical from work.

His main responsibilities today include making Hong Kong the company’s regional hub, as well as sustaining the growth of dermacosmetics. “Since last year, mainland China has become the world’s second biggest market for us after France,” he said.

“And in January, we took back the distributorship of Eau Thermale Avene in Hong Kong. We now have a full team of 72 people, including beauty advisers. On top of this, we have a corporate presence here to manage the drug business in Asia.”

Dermocosmetics sales have mushroomed over the years. Charles noted, though, that the sector is just beginning to take flight. Consumers have become smarter and no longer presume that more expensive products are better than inexpensive peers.

“People prefer a brand which invests in its products, not in the marketing campaign,” he said. “Our approach speaks to customers.”

The next beauty trend is sterile cosmetics. Fabre conceived the idea to develop products for dermatologists to treat patients with severe skin conditions or post-plastic surgery.

“It’s about producing the simplest products. Today, consumers don’t want to have paraben and all these external ingredients that don’t bring any plus,” he said.

“We have developed a full range of products under the label Tolerance Extreme, which have never come into contact with the outside world during production. This allows us not to add preservatives in the formula.

“Ten years ago, the products were not profitable. It was Fabre who insisted that he wanted them for surgeons and dermatologists. He is really a source of energy.”

The article first appeared in the Standard on September 2, 2016.