Why drone maker picked Shenzhen over HK


When the founder of the world’s current top consumer drone maker Dajiang Innovation (DJI) looked around in 2006 for a place to set up his first research base and production floor, he chose a village house in Shenzhen.

Many would have expected Frank Wang, who graduated from the Hong Kong University of Science and Technology (HKUST), to stay put in Asia’s top commercial hub instead of venturing north.

After all, Hong Kong provides a plurality of services rarely offered in one place, ranging from venture capital financing to an efficient trade support network.

But there was something more that the then green technopreneur wanted – a place teeming with people chasing engineering dreams and capable of bringing his envisioned products to life without much ado.

The 35-year-old could not find such qualities in Hong Kong.

“I only design, I do not produce. We have to source even a screw from outside,” Mr Wang, who was born in China’s Hangzhou, told Hong Kong-based news weekly Yazhou Zhoukan recently in his Shenzhen office.

“The divison of labour provided by suppliers here guarantees what we get is better and cheaper than what we could expect.”

DJI has long left behind its modest beginnings and is now ensconced across 11 floors in a building located in an industrial belt where Shenzhen’s high-tech companies cluster.

With more than 3,000 employees, DJI now leads the world in the production of consumer drones used for purposes ranging from archaeological survey to roof inspection, firefighting, sports training and movie filming.

“2014 was the year that drones went from creepy military gear to consumer-friendly video tool, and it’s almost entirely due to DJI, one of the world’s fastest-growing drone manufacturers,” noted Fast Company, a publication in the United States that focuses on trail-blazing and next-to-watch companies, in a recent article.

“(DJI) makes the ubiquitous Phantom line, a relatively inexpensive (US$1,300 or S$1762 for its best) remote-control camera quadcopter. In the past three years, sales grew by a factor of 125,” the magazine said.

Mr Wang, who said he got no higher grade than a B during his HKUST days, told Yazhou Zhoukan that DJI now controls 70 per cent of the world’s consumer drone market while its annual earnings have topped 3 billion yuan (S$660 million).

Mr Wang’s story of giving up the more streamlined and more comfortable business world of Hong Kong for a hard-knuckled entrepreneur’s life in seemingly rowdy Shenzhen is not an uncommon one in this once-upon-a-time southern Chinese backwater whose gross domestic product, in just three decades, has risen to 94 per cent that of Hong Kong last year.

According to Mr Wang, most of his innovation technology staff are, like him, from the mainland and had once been “gangpiao”: meaning sojourners as students in Hong Kong.

“But as for Hong Kongers – there’re almost none here,” he said.

A HKUST professor once told Mr Wang that Hong Kong’s young refused to move to China, citing reasons such as objection by their mothers and being unable to log on to Facebook from the mainland.

The thriving of Shenzhen on the back of technopreneurs such as Mr Wang also contrasts with Hong Kong’s uphill task to become a technological powerhouse, thanks to its political opposition camp.

Early this year, funding for the setting up of an innovation and technology bureau that the Hong Kong government is keen on was blocked in the legislative house.

The government has said the bureau would be vital in the development of the city’s technological talents and help in boosting the sector.

But opposition parties claim the proposal hides a political design by Beijing to infiltrate yet another economic “stronghold” of Hong Kong in its bid to gradually bring the semi-autonomous Chinese city under its heel.

So even as Taiwan, South Korea and Singapore are all running full steam towards becoming innovation technology bases, Hong Kong is retiring to the sidelines, said Yazhou Zhoukan.

“What better news can there be for those competitors still in the field,” quipped the magazine.

– See more at: http://business.asiaone.com/news/why-drone-maker-picked-shenzhen-over-hk#sthash.qvSSwMqN.dpuf

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