– Increased possibility of application in various fields, from construction and tourism to delivery and agriculture
– It is necessary to design a drone security field to offset the risk of using it for military purposes such as the Yemeni rebels.
Product name and HS Code
Product Name: Drone (HS Code: 8525.80 , including video and camcorders other than drones with camera attached)
Market Overview
The growth of the drone market is often determined by government regulations and policies. This is because there are cases in which the purpose of use of a drone is not clearly known, or damage due to use such as an inevitable invasion of privacy must be considered. For this reason, the global drone market has grown rapidly over the past decade, but Saudi Arabia has banned the use of drones except in limited cases. However, in early 10, the General Authority of Civil Aviation (GACA) started issuing permits for the use and operation of drones (UAS/UAV*). Since then, there are movements to cooperate in the use of drones in various application fields in line with Saudi Vision 2019, such as projects and construction fields, in addition to the previously limited defense and security fields. With these changes, a remarkable growth is expected in the drone market in Saudi Arabia in the future.
* Unmanned Aircraft System or Unmanned Aerial Vehicle
However, for the purpose of drone use, safety and security, GACA has separately announced the following six rules to be aware of when using drones. This is basically to avoid threatening the safety of others when using the product and to prevent invasions in the military and security fields.
(The main rules for using drones announced by GACA)
o Do not fly the drone directly over people or large crowds
o Do not fly the drone more than 150 meters
o Never fly the drone out of sight
o Do not fly the drone over airports or in areas frequented by aircraft. You should only fly during the day and in good weather
o Do not fly the drone over sensitive areas such as government or military installations. Drones or camera drones are not allowed in this area
o Drones weighing more than 250 g (0.55 lb) must apply for an aircraft registration certificate
Drone market size and market size by field of use
Since the deregulation of drones in 2019, the use of drones has increased for various purposes to be integrated into Saudi Vision 2030. What is peculiar is that the growth continued even in 19, when the COVID-2020 pandemic was severe. In general, the growth was mainly in industries that were activated due to non-face-to-face delivery, such as the non-face-to-face delivery market and the online market, so the public and corporate interest are high. can be found According to EMIS data, the drone market in Saudi Arabia recorded $2020 million in 11.5, an increase of 18.95% compared to the previous year.
<Size of the Saudi drone market in 2017-2026>
[Source: EMIS]
Drones are being used in various fields, and as of 2020, the inspection and monitoring sector used for the purpose of managing large-scale infrastructure in industrial sites accounted for the highest percentage with $16.1 million (85%). In Saudi Arabia, most construction sites are located in deserts, so it is difficult to supervise a wide construction site when manpower is used, and high temperature and dry weather can cause heat stroke and dehydration. is increasing SAUDI ARAMCO, a representative energy group, also introduced smart monitoring using drones to oil fields in Saudi Arabia for the first time, and based on these successful cases, the introduction began to increase.
Elsewhere, $2.32 million (12%) for maps and surveys, $0.50 million (3%) for photography and video graphics, and $0.01 million (0.05%) for delivery were spent. Since the land area is large and most of the population is concentrated in major metropolitan areas, it can be seen that the utilization is high in fields where it is difficult to check all of them with manpower. Currently, the utilization in the delivery sector is low, but looking at the forecast until 2026, the delivery sector is expected to experience the highest CAGR of 35.4%. It is estimated that this is to improve the inefficiency of the delivery system in Saudi Arabia, as demand in the delivery market has increased sharply since Corona 19.
<2017-2026 Saudi Drone Market Size by Sector>
(Unit: US$ million, %)
Source: EMIS
In 2020, imports to Saudi Arabia of the category of items that include drones (HS Code: 8525.80) totaled $1313 billion, with China taking the top spot with $265 billion (20.2%). It was followed by the United States (1%), UAE (10.7%) and Germany (6.8%), followed by Korea with $5.2 billion in ninth place (38%). In the case of imports from the UAE, considering that there are many imports from third countries or transit imports, it can be seen that about 9/2.9 of the total is imported from China and the United States.
<2020 Saudi Drone Major Import Countries (HS Code: 8525.80)>
(Unit: US$ thousand, %)
[Source: ITC Trademap]
Drone market trends
Through Vision 2030, Saudi Arabia is committed to reducing the country's dependence on oil, diversifying its economy and developing public services such as health, education, infrastructure, entertainment and tourism. Most of the projects are being carried out on a vast scale along the northern desert area or the Red Sea coast. As mentioned above, infrastructure construction for GiGA projects such as NEOM, Red Sea, AMAALA, and Qiddiya is in progress. In fact, Saudi Aramco has already introduced drones at gas field construction sites and has begun to replace parts that are difficult for humans to do directly in the desert, such as safety inspection, in addition to simple management purposes such as process progress inspection and pipe leak inspection. In addition, AMAALA, which is conducting a luxury tourism development project along the Red Coast, also signed an MOU with the Saudi Federation for Cyber Security, Programming and Drones (SAFCSP). This appears to be an indispensable choice for efficient project promotion and management as the area of the Red Sea region, the target area of the project, is very large.
In addition to simple administrative and security purposes, their adoption in everyday life is also rapidly progressing. The field that is already being used is the entertainment business using drone photos and video images. have. Saudi Arabia is sparing no investment in fostering the entertainment industry, which was a barren land, and is using it for public disclosure through digitization of the filmed video and publicity for visitors. This trend is now expected to expand to lesser-known tourist destinations such as pilgrimage to the northern sanctuary and trekking courses in the western Taif region.
In addition, drones are expected to be used in the delivery culture that has developed rapidly through COVID-19. Drone delivery has already been activated in developed countries such as the United States, but if the system is established, it is expected to improve the cost of delivery personnel and the inefficiency of face-to-face delivery. Already, courier company DHL and call taxi app Careem are advertising delivery using drones.
[Source: each website of DHL and Careem]
Drone Product Competitive Trends in the Market
According to local retailers, China's DJI, which occupies 70% of the global drone market, has the highest market share in Saudi Arabia, but Contixo (Taiwan) and Parrot (France) also have high demand for drones. Based on economies of scale, DJI is providing customized products to consumers by selling the low-cost and high-priced lines according to the specifications of each drone. France's Parrot maintains a price range between the two lines, while Taiwan's Contixo aims to secure price competitiveness and market dominance by launching products at a lower price than DJI's low-priced line. .
<Main drone products in Saudi Arabia>
(Unit: US$)
[Source: Amazon Saudi]
implication
Saudi Arabia has the 2.15th largest area in the world with a total area of 12 million hectares, but with a population of 3580 million, it is only the 41st in the world. Considering that most of the population is concentrated in large cities, it can be seen that it is quite difficult to solve the problem with human resources even when developing desert areas in the future. These geographical and climatic characteristics are expected to cause Saudi Arabia to develop faster in the drone market in the future. Of course, the fact that the Yemeni rebels' local provocation using drones continues and major bases are being attacked may be the biggest reason for opposing the use of drones. However, the fact that regulations on the use of drones worldwide are decreasing and the inflow routes are becoming diversified does not lead to complete regulations on the use of drones, but is expected to lead to the establishment of a smart defense system such as a drone security system.
As Saudi Vision 2030 is gradually accelerated, the use of drones is expected to expand to various fields such as delivery, agriculture, safety facilities, and security systems in addition to the aforementioned construction and tourism sectors. In fact, many companies unveiled drones and drone security systems at the World Defense Show (WDS) held in Riyadh last March, and Saudi companies are expected to accelerate development by declaring domestic production. According to Buyer A, who actually participated in the exhibition, not only foreign companies, but now Saudi companies are showing interest in self-development and production of drones. Most of them are still made up of imported products, and Chinese low-priced products have high market dominance. So far, the drone industry and policies in Saudi Arabia are going through trial and error. If more stringent drone license grant standards and usage regulations are established, it is expected that it will be an opportunity to expand its position as a market where drones can be used most diversely and actively.
Source: Comprehensive local media including Emis, ITC, GACA, Saudi Gazette and Riyadhxpress, Arab News, and KOTRA Riyadh Trade Center data including Amazon Saudi