Not long before this, DJI had just experienced a storm of layoffs. It is reported in China that DJI, which has more than 10,000 employees, has laid off 50% of its employees, and the proportion is hotly debated in the circle. Abroad, it is reported that DJI has laid off employees in the United States, including maintenance, support personnel and company representatives who contacted dealers.
Although DJI officials quickly denied this rumor, InfoQ found that some anonymous employees or people close to DJI said that there were layoffs on social platforms such as Pulse, Zhihu and LinkedIn, but the proportion was not that serious.
The epidemic did have a certain impact on DJI's business.
"UAV is a niche product, not just needed, and the epidemic has curbed offline consumption," Chen Lin, an executive of a UAV company in Shandong, told InfoQ. "During the epidemic, the domestic and foreign markets of DJI consumer drones have shrunk to varying degrees, especially in North America and Europe. DJI lost a considerable part of its income, so layoffs are possible."
A foreign media also said in the report that the dealers of DJI in the United States encountered difficulties in delivery, and the transportation was inexplicably cancelled, while the production capacity of DJI in China had not reached the level before production stopped.
The epidemic has disrupted DJI's global supply chain. At the DJI dealer forum, a dealer posted that the dealer who had cooperated with DJI for many years was suddenly terminated in recent months. He also said that DJI's product inventory is very limited, and most or all deliveries to the United States have been cancelled.
Some people even wonder whether DJI will quit the American market.
Monica said that in order to meet the challenges of the external economic environment, DJI is undergoing internal organizational adjustment. According to the analysis of UAV experts, DJI is likely to take this opportunity to streamline its business in North America. However, the cancellation of some dealers indicates that DJI may turn to direct C mode or keep only the largest retailer.
Chen Lin observed that many departments of DJI are indeed shifting this year, and the policy towards domestic agents has also changed greatly, and the attitude has become tougher.
80% of DJI's sales occur offline. According to reports, during the epidemic, many offline agents of DJI have been selling at reduced prices to clean up their inventory. Chen Lin has doubts about this. As far as he knows, no agent has done this, because if the agent sells the goods at a reduced price privately, DJI will punish them according to the seriousness of the case, or even stop supplying them 1 month. However, he said that the possibility of price reduction and clearance is not ruled out. After all, the epidemic is force majeure and the situation is special.
On April 17, according to Shenzhen Satellite TV, Shenzhen leaders went to DJI to innovate and carry out the work of hanging point service enterprises. Wang Tao, founder of DJI, introduced the impact of the epidemic on the company. He said that domestic sales of DJI have recovered to 70% before the epidemic, but overseas sales have been more affected. The problems are mainly in the supply chain and sales end, and the risk of supply interruption of overseas suppliers is high, and the transportation cost is high under the epidemic situation. This effect will be reflected in the second quarter.
Before the outbreak of the COVID-19 epidemic, DJI's overseas business, especially in North America, was facing great challenges due to a series of bans imposed on DJI by American regulators.
In March this year, foreign media sources pointed out that the US government intends to issue an executive order on the grounds of threatening national security, prohibiting federal government agencies from buying or using foreign-made drones. Last June, 5438+ 10, the US Department of Commerce ordered the grounding of nearly 800 foreign-made UAVs, including 12 1 DJI UAV. The U.S. military stopped using DJI drones in 20 17.
In terms of no-flying, DJI's drones have been actively fighting the epidemic overseas, but their overseas competitors have also ushered in development opportunities due to the epidemic. For example, the drones delivered by the Wing subsidiary of Google's parent company Alphabet increased significantly during the epidemic. DJI needs to be alert to the rise of these competitors.
20 17, DJI disclosed that the ratio of domestic and foreign business of the company was 8: 2. DJI products account for 77% of the US market share. With the further review of products by American regulators and the ban on flying, it is conceivable that the development of DJI in the American market will become more difficult. This is not a good thing for DJI, which relies heavily on overseas markets. According to statistics, in 20 17, the market share of DJI in the United States was 85%, but by 20 19, it had dropped below 80%.
The bigger test is that DJI's dominant position in the consumer drone market is reaching a limited return point, which may even be negative.
Consumer drones are the main business of DJI. In 20 16, Wang Tao once told the media that the consumer drone market was close to saturation, and DJI revenue reached 20 billion yuan.
The Report on Market Demand Forecast and Investment Strategic Planning of China's UAV Industry in 20 18- 2023 shows that from 20 13 to 20 16, DJI's revenue was 830 million yuan, 3.07 billion yuan, 5.98 billion yuan and 9.78 billion yuan respectively, maintaining rapid growth year after year.
According to the previous financing documents, the revenue of DJI in 2065438 was+0.757 billion yuan, of which the revenue of consumer drones was 1 493 million yuan, an increase of nearly1times over the previous year, accounting for 85% of the total revenue.
In the next two years, DJI did not publish revenue data. Chen Lin told InfoQ that according to his experience, DJI's sales have been increasing in the past two years.
Only the growth rate is slowing down. According to a statistic, in 20 17, DJI occupied 72% of the global consumer-grade UAV market, an increase of 22% compared with 20 15, while in 20 18, DJI's global market share was 74%, only an increase of 2%.
Due to declining demand and stricter policy supervision, the speed of DJI's launching explosive new products has also slowed down in recent years. UAV enthusiast F Jun commented on Zhihu:
Some insiders believe that DJI will encounter such a dilemma sooner or later, because the market size and development space of consumer drones are limited.
Forward-looking Industry Research Institute predicts that the overall market size of China's UAV industry will reach 35.9 billion yuan in 20 19. IDC predicts that the global market size of consumer and enterprise drones will be 9 billion US dollars, with an average annual growth rate of about 30% in the next five years. At this rate, by 2023, the overall size of the drone market will be only about 33.465438 billion US dollars.
Professor Zhu, Professor of Harbin Institute of Technology (Shenzhen University) and Chairman of the International Affairs Committee of IEEE RAS, analyzed in an interview with InfoQ:
Professor Zhu said that UAV technology began to develop in the 1990s, and most basic technologies have matured. On this basis, the technologies superimposed on the system for different applications are diversified. "In terms of technology, I have paid more attention to the safety and interactivity of drones in recent years, especially after more and more consumers of consumer drones have entered people's daily lives, these two problems will become more prominent."
At this stage, from a technical point of view, consumer drones have been able to better meet the needs of users. Of course, there is still a long way to go to achieve real intelligence, and there are still many technical difficulties to be broken through, such as how to reduce the size, increase stability, enhance image transmission distance and image quality, how to solve the battery life problem, deal with the processing ability of complex scenes, and meet the diverse and multi-level needs of users.
DJI has a clear understanding of the ceiling faced by its business and consumer market, and has been planning transformation since a few years ago.
According to the previously disclosed financing materials, DJI believes that after 2020, the consumer drone market will reach saturation, with a growth rate of less than 10%, while industrial drones and industrial imaging equipment can still achieve a growth rate of 100%.
In the second half of 20 15, DJI set up an industry application department to provide professional solutions for different industries, including agriculture, security and disaster relief, oil, power grid inspection, and construction engineering.
According to the report of Forward-looking Industry Research Institute, the industrial drone industry will usher in explosive growth. It is estimated that by 2025, the industry scale will be close to 45 billion yuan, with an average growth rate of around 30%. Among them, agricultural plant protection is a widely used field of industrial drones in China, accounting for 42% of the applications, with huge market potential.
20 15, 1 1, DJI released the first standardized drone product-agricultural plant protection machine MG- 1, which officially entered the field of plant protection. At that time, the domestic use of drone plant protection had just started, and there were less than 3,000 plant protection machines nationwide. The sales volume of DJI MG- 1 has exceeded 1000 units in five months, and the water test was successful for the first time.
By the end of 20 19, the number of DJI drones had exceeded 40,000, and the maximum plant protection operation area per day exceeded 3.4 million mu. In 20 19, the domestic flying defense area was 230 million mu, and the global cumulative operation reached 500 million mu. In March this year, DJI announced that the shipment of all plant protection machines in the first quarter of 2020 had exceeded 10000 units, one month ahead of 20 19.
At present, DJI is in a leading position in the agricultural plant protection drone industry, but unlike its invincible position in the consumer drone field, DJI faces many competitors in the industrial drone market, including companies such as Feifei and Yihang. Feifei is DJI's strongest competitor in the field of plant protection. Yihang is good at environmental monitoring, emergency rescue and disaster relief, forest fire prevention and other markets.
It is worth mentioning that Feifei and Yihang are both rivals who once confronted DJI in the consumer-grade driverless market. After many twists and turns, they finally lost to DJI in technology, capital and supply chain, and finally decided to transform and develop in the market that avoided the edge of DJI.
20 15, Feifei has completely transformed the field of agricultural plant protection drones. It is difficult to compete with DJI in the field of consumer drones. Later, it was proved that this strategy was correct. After several years of development, Feifei has been firmly in the head camp in the field of agricultural plant protection.
In April of that year, Feifei released the first generation P20 plant protection drone and began to set up a plant protection service team. Seven months later, DJI also began to enter the game. Since then, the two sides have fought many times. DJI has the advantages of capital and technology, has been deeply involved in agriculture for many years, and understands the characteristics of the industry. In 20 18, Feifei technology accounted for 53% of the total market share of agricultural drones, with an annual income of about 10 billion yuan. In the short term, DJI has not yet formed a monopoly.
In order to seize the market share quickly, DJI frequently shows its price tactics and is called "price killer" by the industry. DJI's low price strategy has left many competitors behind, and even many competitors have been squeezed out of the game. According to statistics, in just 20 17, at least 20 UAV enterprises withdrew from the market.
However, at present, DJI is still in the stage of price war in the field of plant protection and its contribution to revenue is limited. DJI once said that the development of agricultural drones is not for profit, but to improve industry efficiency and build a closed-loop service. Last year, DJI's public relations director said in an interview with the media that the three-year unprofitable period proposed by 20 17 would be extended to five years.
At present, the application of plant protection machines in China is still relatively small, and it is in the market cultivation period. With the deepening of DJI and Feifei, the competition in the industry will be intensified in the future.
In 20 16 years, the sales of DJI industrial drones was195.7 billion yuan, accounting for 20% of the total revenue. In 20 17, the sales of industrial drones was 2.64 billion yuan, accounting for 15% of the total revenue. I'm afraid there is still a long way to go before consumer drones become an important growth pole of DJI revenue.
"The industry of DJI has formed a market for integrating resources. There are many partners in the industry, and more and more companies are combining their products with DJI," said Chen Lin. "But whether DJI can occupy a leading position in the industry-class UAV market still needs to comprehensively consider various factors. At present, DJI has made many achievements in the industry, which is a great advantage. " .
(At the request of the interviewee, Chen Lin and F Jun are pseudonyms. )