(Yicai Global) May 26 -- Rising government supervision of unmanned aerial vehicles, or drones, caused by excessive unlicensed flights is cutting back consumer demand in China.
At least 12 unregistered drone events have taken place so far this year, affecting flights at nearby airports. The biggest offenders were in the southwestern city of Chengdu, at Shuangliu International Airport, with nine events taking place in April that diverted almost a hundred flights and delayed others, leaving passengers stranded at the airport.
Many drones that can be purchased in China are not regulated by the government. Spare parts and DIY kits are also easily available, making it easy for consumers to simply buy parts and build their own. On e-commerce platforms, such as Alibaba Group Holding Ltd.'s [NYSE:BABA] Taobao and JD.Com [NASDAQ:JD], rotors, receivers and transmitters can be purchased alongside assembly guides. The cost of the parts needed to assemble a four-axis drone can be bought for less than CNY200 (USD29).
"Unlike products from lawful manufacturers," said Shao Jianhuo, vice president of a top drone maker Shenzhen DJI Innovations Technology Co., "these products lack digital mapping, so flight routes can be planned arbitrarily," meaning nothing prevents them from crossing plane's flight paths or heading into airbases. "The DIY drones are easy to build and don't support real-time monitoring."
Consumer sales at many drone makers are starting to fall as the government ups regulation in the area. Even at DJI, which dominates the industry, domestic sales have fallen.
Last year, there were more than 500,000 DJI drones in customers' hands, logging more than 14 million flights.
"There won't be great growth in the market for professional flyers," a manager at Beijing Yi-Hang Creation Science & Technology Co., or Ehang, told Yicai Global, "and the consumer market will be strictly controller under government supervision."
Most drone buyers are professional flyers who abide by regulations, he said, adding that they shouldn't be hit too hard as they operate in line with the rules. However, some consumers view drones as toys, and don't bother to undergo registration -- they'll disappear under the intensified supervision.