DJI came from the drone and flew into the drone

The illustrations are from Canva Paintable

At present, both drone companies and drone service companies have more or less limited their thinking to the framework of "drones", but DJI's dominance in the consumer drone market has forced other drone companies to find a way to avoid DJI. Industry-level UAVs are undoubtedly one of the breakthroughs, and plant protection UAVs are the most promising directions in industry-level UAV applications, accounting for 42% of all industry-level UAVs.

However, the complex environmental conditions and policy endogenous nature of China's agriculture determine the complex market characteristics of plant protection drones. In this context, after more than ten years of development, the plant protection UAV market has formed a market pattern of DJI and Jifei leading flights and other enterprises flying together today.

Now, the development of domestic plant protection UAV has reached a fork in the road: UAV hardware as a carrier platform has been relatively mature, the ceiling has been visible to the naked eye, the resulting agricultural data derived from the hardware, has become the foothold for the further growth of UAV manufacturers, how to look at and apply these data determines the behavior logic and business strategy of the subsequent development of enterprises, for which DJI and Jifei's approach is obviously completely different.

Why do plant protection drones exist?

China's plant protection UAV market is based on a certain material basis. From a macro point of view, this material basis is first of all under certain historical and geographical conditions, the combined scale of China's 1.8 billion mu of arable land red line and other crops, which determines the overall scale of the plant protection market. At the same time, the mechanization, digitization and intelligence of China's agriculture, as well as the two major trends of agricultural population reduction and aging, jointly determine the application prospects of plant protection UAVs.

From a microscopic point of view, China's land system, as well as the complex agricultural production formed by different agricultural environments in various places, also determines the complexity of the plant protection drone market, which not only needs to face the traditional agricultural machinery, but also needs to revolutionize its own production efficiency. On the one hand, this improves the difficulty of operation and expansion of plant protection UAVs practitioners, but on the other hand, it provides strategic depth for the survival and growth of latecomers.

In this context, plant protection UAV companies are working in the industrial chain (part) of "UAV manufacturers dealer fly defense team farmland and its beneficiaries". However, for the manufacturing companies that permeate today's Internet thinking, it is extremely unfavorable and impossible to limit the corporate strategy to the general framework of agriculture. In fact, the different positioning and different views of different enterprises on this industrial chain determine their different business strategies.

Although DJI and Jifei are both drone manufacturers, their business fields and corporate strategies are completely different. After the hard-hitting failure of the consumer-grade drone market, Jifei has fully turned to the field of plant protection drones, and DJI has blossomed in different fields with technology as the guideline and product as the discipline, thus forming a completely different business idea of the two companies. It is precisely for this reason that there is also a big difference between the two in the face of the data generated in the process of agricultural operations.

DJI: From drones to agriculture

The way DJI participates in all walks of life is achieved through drones, and plant protection drones are only one part of the entire business of DJI, the leader in the drone industry, and for DJI, in the face of strange competition in different fields and different industries, it has not and cannot put too much energy into each segment. Therefore, for DJI, the drone hardware is the foundation of its establishment, and only by doing a good job of hardware can it sit firmly on the Diaoyutai and radiate the sphere of influence to other industry-level businesses.

DJI's competition model is extremely lethal, which is tantamount to "catfish" or even "shark" into the barrel, and in the price war it actively provokes, DJI almost single-handedly changed the market form. In the four years from 2015 to 2018, the price of the MG series of plant protection drones released by DJI dropped from 52,999 yuan all the way to 31,888 yuan, and even the CONTRACT MACHINE WITH A PRICE OF 17,188 YUAN LIKE MG-1P, as long as it continues to purchase 10,000 yuan in the follow-up service, it can be stopped.

In such a situation, on the one hand, the profit of the flight defense service is increased, and the first entrant benefits; on the other hand, the threshold of the flight defense service is pulled to a very low level, and under full competition, the interests of market participants are diluted. Moreover, while the number of fly defense teams is growing rapidly, the quality of flight defense services has not developed synchronously, which has also caused market chaos in the link of fly defense teams to farmland. In this regard, DJI only relies on drones, and there is no way to "correct" the market with the nature of social responsibility of large manufacturers.

In fact, DJI's drone products are essentially for the "pilot" to provide services. As mentioned above, in the industrial chain of "UAV manufacturer dealer fly defense team farmland and its beneficiaries", DJI believes that it has no energy and no need to directly serve the farmland and its beneficiaries, so providing equipment to the more mobile fly defense team on the basis of dealers has become the only choice, and DJI's plant protection drone is almost for this purpose.

DJI UAV is heavy, cost-effective, fast iteration, high degree of intelligence, and DJI plant protection UAV does not need to carry out a lot of preparation before flying like the UAV of Jifei, and still needs human monitoring and operation - it is such a product form that just fits the current market situation based on flight defense service. It is also true that DJI is currently the company with the highest market share of plant protection drones in China.

In addition to making efforts in the flight defense team and flight defense services, the application of data generated in the process of serving farmland by the flight defense team seems to be limited to the limitations of its own corporate strategy and stops at the plant protection UAV product itself. That is to say, for DJI, the value and application scope of agricultural data are limited. DJI's public relations director Xie Khotan also said that DJI was responsible for "providing equipment and infrastructure", while saying that it would not compete with the ecology for business.

Polar Flying: From agriculture to drones

According to the "China Digital Rural Development Report (2019)", the potential market size of smart agriculture in mainland China is expected to increase to 200 billion yuan in 2020. As of 2020, there are 194,800 agricultural machinery operation service organizations in the mainland, of which 75,000 are agricultural machinery cooperatives and 49.661 million rural agricultural machinery practitioners are employed (2020 National Agricultural Mechanization Development Statistical Communiqué). So many people and organizations work through agricultural machinery, but the question is, how do agricultural machinery owners make decisions, and how do they accurately match the needs of farmland? Jifei sees that data plays an extremely important role in this.

Jifei is a relatively "pure" enterprise. It can be said that the plant protection UAV is the entire business of Jifei at present, so unlike DJI, all the energy of Jifei can be placed on the plant protection UAV. But in general, the imagination space of hardware is extremely limited, just like no traditional agricultural machinery factory can continue to grow high, and Jifei needs another way out if it wants to grow. Therefore, Jifei has placed the breakthrough around DJI in addition to the plant protection UAV, and for Jifei, agriculture is a promising place.

However, unlike DJI, which adopts a "tightening core" posture and only sells products, Jifei's business model covers a wider range, and in order to obtain more important agricultural data, Jifei adopts a "product + service" sales model. That is to say, Jifei not only designs and produces plant protection drones, but also has its own plant protection team, which is not only for flight defense operations, but also for "field investigation", collecting various types of agriculture-related data, and preparing for the "UAV aftermarket".

For digital agriculture, The focus of Jifei is obviously on "numbers". Through data, Jifei built the XSAS smart agriculture system, which is known as "only one system is needed from planning to harvesting". In fact, in addition to the plant protection unmanned multi-rotor aircraft, Jifei's UAV products also have unmanned vehicles, self-driving instruments, remote sensing drones and Internet of Things devices, which can natively support the entire system on its own.

At the same time, all this land information, such as area, quality, crop types and quantities, has been collected and turned into digital assets, which is not only conducive to the construction of a digital agricultural management system, but also can be online to financial platforms, such as the Agricultural Bank of China or Alipay, which not only means that agricultural resources are further capitalized and monetized, but also means that the production relations of agricultural practitioners are further integrated into modern production. In this way, Jifei believes that it is an "agricultural technology company" that it is worthy of the name.

And from it, we can also see the contrast between the different paths between DJI and Jifei: in short, if DJI's commercial path is summarized as "starting from drones and going to agricultural application scenarios", then Jifei's commercial path is "starting from agricultural thinking and landing on the drone platform".

The commercialization and application problems to be solved

Although the mechanization, digitization and intelligence of agriculture are the general trend, this does not mean that the current plant protection drone industry has no problems. First, we wonder if heavy-duty drones are a pseudo-demand, or whether they are truly suitable for today's agricultural environment. The current hot large-load UAV may be the product of plant protection UAV companies rolling and competing with each other, but it is not necessarily suitable for the transitional positioning of plant protection UAVs from manual operations to mechanized operations.

First, the endurance of the UAV may be inherently unsuitable for large-load operations, even if the manufacturer desperately strengthens the battery life, charging rate and UAV flight performance, but it can not cover the reality that the UAV can only fly in the sky for a few minutes. For example, the current DJI flagship T40 can only operate for 6 minutes at full load (30,000mAh take-off weight 101 kg). In this way, the operational efficiency of the "nominal" UAV may only be a mirror water moon, which is extremely difficult to achieve in actual operation.

Second, in the plains where mechanized production is applicable, such as Heilongjiang, Xinjiang and other places, the work efficiency of large-load UAVs cannot be compared with ground machinery; and in areas where there are more small plots of land and are more suitable for plant protection UAVs, large-duty UAVs are not so necessary. From this perspective, farms with smaller planting scales cannot actually afford the high price of drones; the scenarios and timing of drones for larger farms are relatively limited.

Second, whether the plant protection UAV can provoke the beam of smart agriculture in the polar flying concept remains to be considered. In the solution of Jifei with drone as hardware and XSAS system as software, the role of unmanned aerial vehicles in the entire system is actually weakened, but the software system is becoming more and more prominent, so the importance of data in the application scenario is naturally self-evident. In this case, the embarrassment of Jifei is that it has the intention to do it, but the amount of ownership is not large enough; DJI has no intention of doing it, but it occupies the largest market.

Moreover, in addition to the advantages, the business model of Jifei with data as the bottom and plant protection drones as the gripper may not be universal to the whole country, and to a greater extent, it is for medium and large farms and large-scale contracted farmland services, and small farms may not be able to afford the price of this system. That is to say, the jifei model wants to expand from a large-scale farm to a small-scale field, which not only requires a lot of time and effort, but also requires a certain amount of luck.

In general, the continuous efforts of DJI and Jifei in the field of plant protection drones show that both are thinking about how to use their advantages to embed themselves in specific agricultural production scenarios. But the complex problems of China's agriculture are by no means solved by one or two companies in a year or two. From this point of view, whether it is DJI or Jifei, no matter which path is chosen, there should be long-term ideological preparation.

Text/Liu Kuang public number, ID: liukuang110