China’s once obscure brands have been making inroads around the world in the past several years. When it comes to PCs, there’s Lenovo. In smartphones, it also has Huawei or, if you live in Asia, Xiaomi.
And then there’s the new but fast-growing market for drones. China’s champ is easily DJI, the world-leading supplier of consumer drones that’s won a big following among hobbyists. DJI made headlines in January after one of its flying robots crashed onto the White House lawn by accident, part of a recent string of embarrassments for the U.S. Secret Service.
Another Chinese company looking to profit in the drone business is taking a different tack by focusing on components. Chongqing Zongshen Power said this month that an engine it supplied for flight by a “Rainbow 3” drone developed by the government-run China Academy of Aerospace Aerodynamics passed a key test on April 29. As a result, Zongshen, a supplier of motors for scooters and motorcycles, plans to make a push into the aviation business. Zongshen developed the engine with the Tianjin Internal Combustion Engine Research Institute.
China sales alone look promising for Zongshen. The country’s market for drones – including for commercial and military uses — will reach a cumulative 300 billion yuan, or $48.4 billion in the next decade, and sales of engines will account for a third of it, according to a report this month on the People’s Daily website citing China Galaxy Securities analyst Chen Xianfan. Most of the engines are imported, leaving plenty of room for import substitution, the report said, citing Zongshen.
Zongshen also recently signed agreements with Qingdao Hong Baichuan Metal Precision Products to boost its drone (also called unmanned ariel vehicle, or UAV) business. Zongshen, for instance, will invest 33.5 million yuan, or $5.4 million, for a 67% stake in a new company that will make drones and parts. Earlier, Zongshen invested 70 million yuan, or $11.3 million, into Hong Baichuan for a 28% ownership stake.
Alan is serial entrepreneur, active angel investor, and a drone enthusiast. He co-founded DRONELIFE.com to address the emerging commercial market for drones and drone technology. Prior to DRONELIFE.com, Alan co-founded Where.com, ThinkingScreen Media, and Nurse.com. Recently, Alan has co-founded Crowditz.com, a leader in Equity Crowdfunding Data, Analytics, and Insights. Alan can be reached at alan(at)dronelife.com