Top: An UAV made by XAircraft. Above: Peng Bin (right), chief executive officer of XAircraft, and Justin Gong, co-founder of the company, display an UAV model. The path to success for innovative companies, like XAircraft, is to establish themselves in a niche market. Provided to China Daily

Editor's notes: Innovation has taken a central role as China is determined to transform from a quantitative to a more qualitative way of growth. Once the "world's factory", the Pearl River Delta (PRD) region is now making an effort to become a hub for innovation in line with the trend. From this week, we'll be introducing a weekly column to bring to our readers some of the most innovative firms based in the PRD region.

Ten years ago, it was unthinkable that unmanned apparatus could be used to monitor crop growth or deliver food. Now, such chores are increasingly being relegated to unmanned aerial vehicles (UAVs) which have also found use in many other areas.

"In the space dimension of 100 to 300 meters above the ground, a new industry is emerging," said Peng Bin, co-founder and chief executive officer of XAircraft, a Guangzhou-based company specializing in developing and manufacturing UAVs.

Of course, his company's products have found many fans among the aerial photo enthusiasts. But Peng insisted that he didn't design and produce UAVs for recreational use. But rather, it's something "technologically meaningful", he said. "The UAV industry is one that can help solve a range of problems such as providing support for rescue operations," he said.

An increasing number of government organizations in various countries have adopted UAVs for various tasks. "Governments believe that the new technology can enhance their work efficiency while reducing costs," Peng said.

In the aftermath of the Yunnan earthquake in August this year, UAVs were widely deployed as "silent commanders" for surveys and to assess the damage along mountainous roads so that relief and rescue operations could be carried out. UAVs played the role of "competent rescuers", positioning people trapped in the mountains and are waiting to be saved.

With seven years of development and improvement, the capability of XAircraft's UAV products has been proven through a wide range of tasks, including low-altitude logistics, security monitoring and control, forest fire prevention, geographical prospecting and film shooting.

Peng said a rapidly expanding market for UAVs is the labor-intensive courier service industry. With labor costs climbing, delivery companies are finding it increasingly hard to stop the erosion of their profit margins. UAVs, Peng said, can offer them a viable solution, especially when the cost of the devices is coming down fast.

He predicted that UAVs will be widely adopted for use by courier service providers around the world in coming years. "It (delivery service) will become a huge market for UAVs," he said. XAircraft has been working with various courier service providers in conducting test flights. He expected his company to have 5,000 UAVs in use by the end of this year.

The civilian UAV market has grown rapidly in recent years, with total sales exceeding $100 billion. By 2020, sales of UAVs on the mainland are expected to top 6 billion yuan ($982 million). Total sales of civilian UAVs in the mainland market are expected to reach 46 billion yuan in the next two decades.

As a pioneer in the design and production of UAVs, Peng recalled that when he started off seven years ago, the industry was still in its infancy. "When I told my friends I was going into the UAV business, they thought I was joking," he said. However, Peng's decision was not made on impulse. He developed a fervent love for electronic products early in life. After leaving school, he worked at a manufacturing company and saw how innovation and automation could work wonders in enhancing efficiency and productivity in factories.

China has plentiful supply of manpower, huge manufacturing capacity and a large market. "What it lacks is creativity," Peng said, and he was determined to do something about it.

To foster a sense of creativeness and innovation in his company, Peng recruited a team of more than 100 designers and engineers dedicated to research and development of ideas and products. He calls them a team of "geeks" who are given a free hand to try out fresh ideas no matter how outlandish they may seem at first sight.

In its first fund-raising exercise, XAircraft secured an investment of $20 million from Chengwei Capitalin in September. Chengwei is a seasoned venture capital fund that is well-known for its ability to pick winners, including popular video website Youku and chain hotel Hanting Express.

Peng said the funds will be used in research and developing new products, marketing and an industry chain.

sally@chinadailyhk.com

(HK Edition 10/30/2014 page9)