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Tencent millet joins the group drone to usher in the era of bloody
In 2016, the Chinese drone market entered a phase of intense competition and transformation. Xiao Wan, vice president of Xiaomi, announced on Weibo that Xiaomi’s spring 2016 product launch event would take place on February 24. During this event, two eco-chain products—drones and smartwatches—were set to be introduced alongside the Xiaomi 5 smartphone. According to reports from the South China Morning Post, Xiaomi's upcoming drone was not aimed at the high-end market but rather at consumers seeking value for money, with an estimated price around 1,000 yuan.
At the opening day of CES 2016, Tencent partnered with Zero-Intelligence to officially unveil the YING drone, powered by Qualcomm’s Snapdragon flight platform. Industry analysts expect this consumer-focused drone, designed for travel, photography, and event recording, to hit the market in the first half of 2016. After years of rapid development, the Chinese drone industry now includes over 400 companies, capturing more than 70% of the global market share. The sector is dominated by two major players: Southern Xinjiang (innovation) and North Zero (Intelligent Control). With the entry of big brands like Xiaomi and Tencent, many experts believe the market is undergoing a “shakeout,†where only the strongest will survive, and the landscape could be reshaped within the next few years.
Meanwhile, industry giants are forming strategic alliances. Lufthansa signed a collaboration agreement with Shenzhen DJI Innovation, aiming to develop new drone technologies. According to DJI’s PR director, this partnership involves exchanging technical expertise and providing each other with developer platforms. DJI has also partnered with Airbus, Panasonic, Ford, and even the NBA, solidifying its position as a leading player in the drone space. In 2015, DJI generated $1 billion in revenue and was valued at $10 billion. Moreover, according to the FAA, DJI accounted for 45.4% of all registered drones in the U.S. in the latest month.
Zero-Intelligence, another key player, joined forces with Tencent to launch the YING drone at CES 2016. Under this partnership, Zero-Intelligence handles R&D, manufacturing, and logistics, while Tencent manages product planning, marketing, and distribution. This collaboration reflects the growing trend of tech giants entering the drone space, bringing both resources and market reach.
Xiaomi also made moves into the drone market, partnering with Guangzhou Feimi Electronic Technology. From May to June 2015, the two companies filed 23 invention patents and four utility model patents, covering aircraft design, control systems, propeller structures, and more. Xiaomi invested in Feimi, which handled the design and production, while Xiaomi focused on marketing and sales.
Industry insiders suggest that due to the influx of strong players, the Chinese drone market is moving toward a multi-polar competitive structure. However, the path is becoming increasingly difficult. Skye Drone founder Gui Xiaoying noted that it's extremely challenging to enter the aerial drone market, given the dominance of companies like DJI and Intelligent Control. He emphasized that startups must avoid direct competition with these giants and instead explore niche markets.
Wang Pengwei, chairman of Guorun Investment, highlighted the high costs of R&D and manufacturing in the UAV industry. New entrants need to have unique patented technologies to stand out. Analysts also recommend focusing on vertical applications such as logistics and agricultural drones, where the market potential is significant. With the central government’s 2016 No. 1 document promoting agricultural automation, the plant protection drone sector is expected to grow rapidly.
As the market becomes more saturated, investment in the drone industry is becoming more cautious. Many startups lack the necessary technical strength or sustainable business models to attract funding. With the window for new entrants closing, the future of the Chinese drone market looks increasingly competitive and unpredictable.