Korean Drone Makers Lose Home Turf
The Korean drone market has already been dominated by foreign drones. Drones made by DJI of China as toys and for leisure activities account for more than 60 percent of Korea's drone market. They also account for more than 70 percent of the industrial drone market in Korea. DJI, the world's largest drone company, dominates the Korean market with its technological prowess and price competitiveness.
Even Korean public institutions are highly dependent on Chinese drones despite security concerns. All 13 drones that Korea Airports Corp. has bought since 2016 are DJI products. DJI is even taking subsidies from local governments in Korea. When farmers buy drones, local governments pay subsidies which amount to about 50 percent of their prices. A significant portion of the subsidies goes to DJI.
Critics point out that Chinese drones’ large market share is attributable to the relatively weak foundation of domestic drone-related industries and the government's prevention of large companies from entering the drone market. Drones were designated as an item for small and medium-sized enterprises in 2017. Currently, Korea has about 200 drone manufacturers, with many of them small companies with average sales of less than 500 million won. Investment in R&D is urgently needed for technological advancement, but they cannot afford to do so.
Participation in tenders for drones arranged by public institutions is like trying to get blood out of a stone. Only a small number of Korean drone makers can satisfy the difficult standards on manufacturing facilities and inspection processes. Korea's industrial drone market is expected to grow to 5.5 trillion won in three years. But Korean companies are losing their home turf to drone makers from China, the world's No. 1 drone powerhouse.
Industry watchers say that Korean drone makers are facing competition from formidable Chinese companies before they secure competitiveness. They are unable to respond to Chinese players due to lack of technology and infrastructure.