State of the Drone Report: South Korea

With globally renowned drone manufacturing and drone services companies that include DJI, Autel, Yuneec, Terra Drone and many others, it is safe to say Asia is the home of the commercial drone.

Of course, it would be enough with just the mention of DJI alone; but it is great that there are other companies in the region that are standing on their own two feet when it comes to making world-class drone technology or offering world-class drone-based services.

Take India for example; China’s next-door neighbour that decided it needed its own commercial drone industry, and effected protectionist measures to ban the import of small drones so it could give local drone manufacturers entrepreneurs a chance.

Well; South Korea has not gone to those drastic measures yet, but – as the report below from Drone Industry Insights will show – it has a robust drone value chain that spans across several industries.  

Let’s find out what is on the ground.

Despite the omnipresence of Chinese and Japanese neighbours, the South Korean Drone Market is also a strong player in the global drone economy.

A quick search for commercial drone activity in South Korea reveals examples such as a drone show to celebrate the Year of the Dragon, and the announcement of new counter-drone technology which, although more military-oriented, still provides an interesting development for those interested in countering drone activity.

Recently, drone soccer, a South Korean invention, showcased a match at CES 2024 in Las Vegas to help promote the first-ever drone soccer World Cup (to be held October of 2025 in South Korea).

As if all of this weren’t enough, South Korea also created the first hydrogen fuel cell drone, and  in terms of operations, there will be an expansion of drone deliveries of food and essential items from Busan.

And all of this is on display right now precisely in Busan at the annual Drone Show Korea 2024.

This year’s theme is caring for the world through boundless expansion, and since not everyone can be in Busan to enjoy this fantastic gathering, let us dive deeper into the composition and potential of the South Korean Drone Market.

Opportunity for Drones in South Korea

With a population of 51.97 million in an area of roughly 100,000 km², South Korea is among the more densely populated countries in the world.

And despite its smaller size, it has a real GDP ranking in the global top 15 countries, which translates into high purchasing power. In other words, the country certainly has the financial capacity to be a leader in drone technology.

But what can drones be used for in South Korea?

In addition to already-popular drone shows, South Korea also has plenty of forests and approximately 70 percent of the country is considered mountainous. This bodes well for the aforementioned drone deliveries since drones are capable of traversing these terrains faster and more efficiently than other services (think medical emergencies).

Additionally, the urbanisation rate of 81.5 percent is not only another good sign for deliveries, but it also suggests that the areas outside of cities are not so densely populated, which means that there is plenty of space for drones to operate in Energy, Agriculture, and Construction operations (thetop three global industries).

Finally, with an aging population and plenty of infrastructure that needs to be sustained, there is a lot of potential for automation, and this is something drones can excel at.

South Korean Drone Market Composition

This brings us to the topic of what drone companies in South Korea are already doing. Based on results from the latest Drone Industry Survey, there is a very high amount of diversity in the South Korean drone market, with no industry segment taking up more than 20 percent.

The highest proportion of companies are either hardware manufacturers (seventeen percent) building drones for others or work in consulting (seventeen percent), sharing their advice and knowledge on the ins and outs of this competitive landscape.

Closely behind these, we find software manufacturers (fourteen percent) and companies that specialise in adapting drones for special tasks through engineering & integration (fourteen percent).

Perhaps the most interesting observation here is that the two segments which are usually at the top of drone activities fall into fifth and sixth place within the Korean drone market.

Drone Service Providers (DSPs), which are usually the most common type of drone company, represent only (ten percent) of drone companies in South Korea, while Training and Education companies also represent ten percent (despite often being the second most common business focus).

 And yet it is equally interesting to note that South Korea has a lot more mid-size drone companies than in the rest of the world. Although it is still the case that a majority of drone companies in South Korea have 50 employees or less (75 percent), there is a relatively high number of companies with 50-200 employees (seventeen percent).

In North America, this figure was only nine percent, while the DACH Region only had about six percent. Essentially, medium-sized drone companies in South Korea are two to three times more common than in other wealthy economies, which is certainly a unique feature of the South Korean drone market.

Priorities and Challenges for Drone Companies in South Korea

Naturally, one drawback of having more medium-sized companies is an increased level of competition.

South Korea is the first country in our country series where “Competition” ranks among the Top 3 challenges. This is particularly interesting given the high variety of diversity in what companies do.

To put it differently, if 60 percent of companies were drone services providers (DSPs) then it would make sense to hear that competition is fierce, but as mentioned previously, no industry segment represents even 20 percent of the total, and drone companies in South Korea still perceive competition as a top 3 challenge, albeit the third-ranked one.

The top challenge, inflation, is a temporary economic development while the second-ranked challenge is common across the globe (i.e. regulation).

So; what do drone companies in South Korea prioritise within this competitive landscape?

Not surprisingly, the top priority in this market is also Marketing & Sales. After all, when competition is fierce, companies need to spend a lot of time and resources to stand out and increase their sales to solidify or expand their market position.

Other top priorities are Software Development and Hardware Development, which once again suggests that the South Korean drone market is a bit more focused on producing drones themselves rather than selling them as a service.

Finally, two important points regarding proprieties and go beyond the results of the annual survey.

The first is the importance of securing financial resources to continue growing. Many drone companies in South Korea find it difficult to acquire long-term contract funding, while others such as Pablo Air have chosen to prepare for an eventual IPO to expand their financial resources.

Either way, increasing the amount of investment will be an important issue for South Korea.

The second important issue for the South Korean drone market as a whole regards international growth. Although exports reached a level of $11.1 million in 2023 and this was almost five times higher than the initial plan, it is nevertheless a sum that needs to continue to rise in order to realize the country’s full drone market potential.

South Korean Drones: A Competitive Landscape

The high amount of diversity and competition are likely among the core reasons why South Korea is also the first country in the country series where the level of optimism (6.3) is lower than the global average (6.6).

To be clear, the optimism is still there and drone companies in South Korea are not pessimistic about the future. This is a fine yet fundamental difference because it shows that all things considered, the market as a whole has a positive outlook on the future.

All things considered; the South Korean Drone Market can perhaps best be summarised by one word: competitive. And here it is imperative to point out that competition is not always a bad thing, especially when it comes to innovation.

Drone companies in South Korea are not only competing against each other to innovate and excel, they are also forced to compete with their powerhouse neighbours in China and Japan.

By being and remaining “competitive”, these companies are showing that South Korean drones deserve a prominent place in Asia and the rest of the world.


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