The world’s largest drone manufacturer, DJI, is permanently closing its flagship retail store in Hong Kong from August 16. A notice placed on the store’s entrance since August 9 says the move comes in the wake of the “evolving needs” of the market and the company. But there are other factors that could have prompted DJI to take this decision.
DJI’s Hong Kong flagship store is located in Causeway Bay, which is one of the world’s most expensive shopping districts with formidable commercial real estate rents.
When the three-storied building opened in 2016, it was obvious that DJI didn’t cut any corners to make the store an immersive haven for drone enthusiasts. From DJI’s website:
The 10,000 square feet store features DJI’s full range of consumer and enterprise products, flying areas, experience zones, and inspirational photos from the aerial photography community SkyPixel. On the building façade is an animated display highlighting scenes of life with a DJI drone and the instantly recognizable shapes of the drones themselves.
But as inviting as this place may be, retail sales in Hong Kong have been witnessing a slump since the last few years. Sales first took a beating in 2019 because street protests kept travelers away. And in 2020, the coronavirus pandemic lockdowns started. This is why many other brands including Adidas, Gap, and Esprit are also shutting shop in Hong Kong.
Meanwhile, the notice DJI pasted on the storefront points out its customers will still be able to buy drones from its online store as well as authorized dealers, saying:
We thank all the customers who have shown great support to us throughout the past few years. DJI will remain committed to our customers and partners in the Hong Kong market and around the world as we continue to develop the industry’s most advanced drones and creative camera technology.
Are new aviation laws to blame for DJI Hong Kong store shutdown?
While deteriorating foot traffic in the midst of increasing global competition could be reason enough for DJI to shrink its physical retail operations, it doesn’t help that Hong Kong has recently tightened the rules for recreational drone flyers.
The newly passed Small Unmanned Aircraft (SUA) Order requires hobbyist pilots to register, train, and pass tests before they can fly their drones. As per these laws, all drones weighing between 250 g and 7 kg will need to be registered, while operators will have to undergo mandatory online training programs. Further, for any drone that weighs more than 250 g, insurance will be necessary. The insurance coverage can range from $642,000 to $1.3 million for the larger drones weighing over 7 kg.
These new rules come into effect in June 2022, though a six-month grace period will be given to pilots to familiarize themselves with the new requirements. But the general sentiment in Hong Kong is that for a recreational user, drone flying is going to become a lot more expensive, and hence, probably not worth the trouble.
In any case, it’s a shame to see DJI shut down one of the very few retail stores it has out there. But probably it makes sense for the company to tighten the purse strings in an uncertain economic climate.