Applications in wide-ranging fields spawn huge market, promising lead across world

Stakes are high and Chinese manufacturers of unmanned aerial vehicles, commonly known as drones, are seeking to fly higher with their latest models that are multipurpose and smarter, promising to grab as much share as possible of what is estimated to be a double-digit multibillion dollar market globally already and set to grow further rapidly.

With drones finding applications in a wide range of fields — farming, cargo transport, aerial photography, surveillance and security operations, power line patrolling, emergency rescue work, surveys and cartography, to name a few — the future for this market is going to be exciting, experts said.

A report from market tracker Mordor Intelligence said revenue of the global delivery drones market is expected to grow from $1.97 billion in 2023 to $11.66 billion by 2028, at a compound annual growth rate of 42.65 percent.

Data from the Shenzhen-based Qianzhan Intelligence Co Ltd said the industry-level drone segment has witnessed explosive growth in China, with sales revenue projected to increase from 27.3 billion yuan ($3.73 billion) in 2020 to 265.8 billion yuan in 2026.

Industry-specific drones, market experts said, are expected to see their value surge as they could help address labor shortages, besides enhancing all walks of life.

In August, DJI, the world's largest commercial drone manufacturer by market share, unveiled the FlyCart 30, its first cargo drone, thus foraying into the burgeoning delivery and logistics sector.

The FlyCart 30, which may be available only in the China market initially and whose price is 125,000 yuan, has a four-axis, eight-propeller multi-rotor configuration that allows a maximum range of 16 kilometers on a maximum payload of 30 kilograms in dual battery mode, DJI said.

It can be used to move cargo to mountainous regions, ports and rural areas, with flight altitude reaching 6,000 meters, which means it can serve a range of needs.

DJI said trials of the model have been underway in the mountainous areas of Qinghai, Sichuan, Guizhou and Anhui provinces and Xizang autonomous region. It has successfully transported daily supplies, photovoltaic panels, building materials and emergency supplies so far.

The Huangshan Mountain Scenic Area in Anhui province has taken a lead in using DJI's cargo drones to deliver supplies. Initial reports suggest the FlyCart 30 drones have helped improve transportation efficiency in the mountainous region, besides relieving labor shortage. They have transported more than 96 metric tons of materials like daily necessities and garbage since they started operations, DJI said.

"We are bullish on the prospects for aerial transport and hope to effectively solve the challenges arising from complex terrain and last-mile transportation for the industry," said Zhang Xiaonan, strategic director of DJI.

Zhang said DJI has invested heavily in industry-level drones, which have been widely used in the fields of agriculture, energy, mapping and public security, and become an indispensable productivity tool.

"The emergence of industry-level drones has reshaped people's lives and production modes, as well as promoting the development of various industries," Zhang said, highlighting that although such drones are still in the initial stage of development, their applications will be more extensive in the future as related technologies advance.

Delivery drones have become increasingly widespread in recent years, helping increase the reach of e-commerce companies. Chinese e-commerce giant JD and courier and logistics company SF Holding have been exploring the application of drones to logistics, especially last-mile deliveries.

JD said it has used innovative drone technology to reach consumers in some of China's hard-to-reach remote areas. The drones are developed by JD-X, JD's research and logistics innovation lab, which is focused on developing smart logistics solutions to make the passage of goods from warehouses to Chinese consumers quicker, cheaper and more efficient.

SF Holding said it has rolled out several types of drones for delivery services, with a maximum payload of 25 kg and flying distance of 100 km.

In the global delivery drones market, the Asia-Pacific region will witness the highest growth and China is the largest market already. Increasing support from the authorities concerned for commercial drone operations is propelling the growth of drone delivery operations in the region, the Mordor Intelligence report said.

Pan Xuefei, a senior analyst at market research firm International Data Corp, said applications of delivery drones are still nascent, adding such drones are mainly used to improve delivery efficiency in remote mountainous areas and sparsely populated regions.

Civilian drones are basically consumer- and industry-level equipment. In the consumer electronics sector, drones are mainly used in aerial photography, while industrial applications of drones are for patrolling power lines and similar operations, which will see immense demand in China, potentially boosting their worth, industry insiders said.

Jason Low, an analyst from market research company Canalys, said major drone companies are concentrating on professional and industry-level drones, spending a large part of their investment on developing software and hardware platforms, and attracting developers to create apps and new use cases for their drones.

The industrial drone market has huge growth potential, said Yang Jincai, director of the Shenzhen Unmanned Aerial Vehicle Industry Association in Guangdong province. "However, we still need time to see the large-scale application of drones in various sectors."

Experts also said China is at the forefront of state-of-the-art agricultural drones, the fastest-growing, most widely used and mature industry-level drones.

DJI has been devoting a great deal of attention to farm-specific drones in the hope of helping farmers improve the efficiency of sowing seeds and spraying fertilizers and pesticides, as well as increasing the use ratio of intelligent agricultural equipment.

Its agricultural-use business began in November 2015 when it launched its first farm drone, the MG-1, marking its diversification into the segment. The Shenzhen, Guangdong province-based company is bullish about the prospects for farm drones as demand for such gadgets has surged and the whole industry is expanding rapidly.

The company has also used drones to carry out three-dimensional digitization of national cultural heritage, a move that will make contributions to the preservation, restoration and research of cultural heritage and historical relics.

XAG Co Ltd, China's largest agricultural drone maker, is ramping up efforts to develop farm-specific drones, step up investment in research and development, and expand its footprint in global markets as part of its broader drive to build a smart farming ecosystem.

Justin Gong, co-founder of XAG, said agricultural drones have been widely used for spraying pesticides, sprinkling fertilizers and sowing seeds to help farmers improve efficiency and reduce costs.

The company has trained lots of young people who went back to the countryside and became drone pilots and robot operators instead of directly selling the devices to farmers, Gong said.

Drones and robots can replace manpower for labor-intensive and tedious farm work, Gong said, adding that reduced use of chemicals and fertilizers could eventually help lower farming costs.

The Chinese authorities have released a guideline to promote digital technologies in rural areas, as part of their efforts to advance agricultural and rural modernization.

"Our ultimate goal is to create a smart agriculture ecosystem in which all the repetitive, tedious and dangerous jobs are assigned to drones and robots, allowing farmers to focus on decision-making with the aid of big data and artificial intelligence," Gong said.

He further said digital technologies help accelerate the industrialization of the Chinese agricultural sector. Lower production costs can improve the competitiveness of agricultural products. The company aims to expand its global footprint in Southeast Asia, Eastern Europe and South America in the next few years.

Chen Shengdou, director of the China Agro-tech Extension Association, said farmers have high expectations for modern agricultural equipment that can transform, upgrade and develop traditional agriculture. Farm drones, which have the highest technical content and the largest market demand, have been increasingly used to safeguard a wide range of crops, he said.