Drone makers see soaring growth but dark clouds circle industry

Michael Perry, Director of Strategic Partnerships of DJI, reaches a drone during a demonstration in Shenzhen, China December 18, 2015, two days before the opening of DJI's first flagship store.[Photo/Agencies]

Shipment of consumer-level drones rose considerably last year. "But in terms of market value, it is still the industrial drones that take the lead," Xiao said.

While the expansion has brought huge amount of capital into the industry and attracted more people to join in, some players say the market may see a shakeout within the next two or three years, when a number of manufacturers may be weeded out.

Many drone makers in the country have already entered the stage of B-round financing, and funding has been tightening, Gui Xiaoyan, founder of drone maker Skye Intelligence, said.

"The drone industry has, in general, gone through the starting-up period. If those who entered the industry at an early stage aren't able to develop advantages in their products, they may soon be weeded out," Gui told the Securities Daily, adding only those with advantages in specific functional areas would survive in the long term.