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.

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