The Battlefield Spans Both Virtual and Physical Realms

Gu Yiming, Investors Network

The so-called "competition" between Insta360 and DJI has consistently captured media attention.

Recently, with the onset of the new snowboarding season, the rivalry between these two tech giants has transitioned from online banter to real-world competition. From promotions by snowboarding clubs and comparisons of experiences by community members, to reviews by short video bloggers and Double 12 promotions at offline dealerships, both virtual and physical platforms are abuzz with efforts to win over every consumer.

Indeed, regardless of the social media buzz generated by these two companies, the strength of their products remains the cornerstone of success in the tech consumer market. This winter marks the official commencement of the "duel" between these two industry behemoths.

The Eve of the Duel

Liu Chuanfeng (a pseudonym) is an avid snowboarder who has invested heavily in gear since taking up this extreme sport. As his sliding skills improve, acquiring an action camera becomes the final piece of the puzzle.

Every year, major ski resorts are inundated with newcomers eager to capture memorable moments. However, photographers at the base typically focus on skilled experts, and differences in skill levels among friends make continuous shooting challenging. In this context, action cameras emerge as the optimal solution.

In June of this year, Insta360 made its debut on the STAR Market, surpassing a trillion yuan in market value. By early 2024, Insta360's X4 camera had become a staple for ski resort "veterans" seeking to capture stunning footage. This breakthrough in the capital market set the stage for subsequent developments.

On one hand, investors hope Insta360 will weave compelling narratives, and the company is actively pursuing this goal. Across major social media platforms, Insta360 showcases its products in various usage scenarios, spanning sports and daily life. The message is clear: Insta360 is not just for sports enthusiasts but also serves as an ideal tool for ordinary individuals to document their lives, thereby expanding its customer base to include video creators and life recorders.

On the other hand, action cameras are gaining mainstream acceptance and drawing attention from competitors. DJI, renowned for its prowess in drones and gimbal cameras, introduced the Action sports series and the Osmo 360 panoramic camera. This move encroached upon Insta360's core market, making competition inevitable.

This summer, financial headlines were dominated by the overt business battles between these "two giants," including Insta360's plans to venture into drones and founder Liu Jingkang's frequent comments on DJI. However, both companies recognize that consumer word-of-mouth and product strength outweigh sensational headlines, as they offer a more authentic, penetrating, and performance-oriented perspective. This winter, every community event at ski resorts, every product experience shared in short videos, and every consumer's purchasing decision will subtly influence product sales and, consequently, the capital market's valuation of Insta360.

This snow season, the duel is on.

Insta360 and DJI: Diverging Paths

In today's consumer decision-making landscape, the power lies not in overwhelming advertising but in the influence of various communities.

Yao Jian, the former president of Arc'teryx Greater China, once recounted an experience where he recommended Wilson's Federer-model tennis racket to his child, only to have the child counter with a racket recommended by a friend met in a community. Consumers' media consumption has shifted from television to the internet, branching out from online communities to offline clubs. Lululemon's rise to prominence exemplifies this trend, as it expanded from stores to various yoga groups.

Insta360 clearly understands and embraces this strategy. This snow season, the company sponsored over 100 devices for Chongli Genting Snow Park's school. These devices not only assist coaches in recording sliding postures but also capture students' sliding issues and freeze memorable moments for consumers at the ski resort.

Moreover, from the moment Liu Chuanfeng arrived at Jilin Wanfeng Ski Resort, he was virtually surrounded by Insta360. Outdoors, the resort was adorned with prominent yellow advertising flags bearing the Insta360 logo. Indoors, the ski club Liu joined hosted an offline raffle, with an X-series camera as one of the prizes. After the event, when Liu posed for a group photo with club members, they were arranged to hold Insta360's yellow brand banner.

This omnipresent scenario penetration aims to infiltrate consumers' minds. However, consumers have become increasingly rational, with product experiences shared among friends, multi-dimensional comparisons in short videos, and hands-on evaluations in offline stores all influencing their final decisions.

After consulting numerous friends, Liu Chuanfeng gained a clear understanding of the differing product reputations of Insta360 and DJI. Essentially, these reputations reflect the distinct development paths and fundamental DNA of the two companies.

Supporters of Insta360's X series appreciate its simplicity and ease of use, making it incredibly convenient to capture stunning footage. This simplicity allows consumers to "shoot first, frame later" during sports shooting, automatically hiding the selfie stick and syncing the footage to a mobile app for easy editing of fun and visually appealing videos. In contrast, those who opted for competing products believe that the X series still has shortcomings in battery life, lens protection, and weight.

Conversely, advocates of DJI's Action sports series/Osmo 360 panoramic camera praise its superior image quality, longer battery life, lighter weight, and better waterproof and wear-resistant lens performance. However, those who purchased competing products find DJI's products challenging to master, requiring not only parameter adjustments but also enhancing the footage's coolness factor.

Ultimately, the firsthand experiences of these two consumer groups highlight the fundamental differences in the DNA of the two companies: Insta360 has constructed a formidable software moat, while DJI's core strength lies in refining high-quality hardware. Insta360 and DJI are taking diverging paths, with consumers' decisions varying based on individual needs such as usage scenarios, personal sports skills, grip endurance, and desire for stunning footage.

These differences are also frequently highlighted by short video bloggers. By comparing aspects like highlights control, battery life, and ecosystem, they generally agree that Insta360's X series is more beginner-friendly, while those seeking extremely high image quality opt for DJI's products.

In response, Liu Chuanfeng also visited the Shanghai stores of both companies to gain a more intuitive understanding of their product strength, channels, prices, etc. He discovered that both similarities and differences coexist.

The similarities lie in the fact that both companies' channel strategies and product after-sales services are largely consistent. Whether Insta360 or DJI, offline sales primarily rely on dealerships, including the two stores Liu visited. Meanwhile, the warranty periods, on-site activation, and other services for both companies' product series tend to be uniform.

The differences, however, are stark in the styles conveyed by the dealership stores of the two companies. In Insta360's Expo Experience Store, models dressed in ski suits are prominently displayed, exuding a stronger vertical racing vibe. In contrast, DJI's Taikoo Li Qiantan Store features a significant area dedicated to drone products, highlighting a combined strategy.

Specifically, in terms of product feel, Insta360's newly launched X5 full series boasts a Double 12 promotional price of nearly 3,200 yuan. Compared to the X4 series, this new product optimizes battery life and lens performance but is also bulkier and heavier in hand.

DJI's Action 6 full series also offers a Double 12 promotional price of nearly 3,200 yuan. However, compared to Insta360's X products, the Action series adopts a different framing approach, requiring users to pay attention to composition when shooting. The Osmo 360, with its panoramic mode, costs nearly 2,200 yuan and differs in functional configurations. Overall, DJI's products are significantly lighter.

Initial Battle Report of the Duel

Insta360 and DJI are taking diverging paths, and their capital strategies reflect these differences.

In short, Insta360 Innovation follows a traditional path of "external financing + going public," relying on capital support to achieve rapid expansion and technological R&D. In the first three quarters of this year, the company's revenue reached 6.61 billion yuan, a year-on-year increase of 67.18%. However, its net profit attributable to shareholders and net cash flow from operating activities decreased by 5.95% and 4.89%, respectively. During the same period, the company's R&D expenses were 1.085 billion yuan, a year-on-year increase of 127%, with an R&D expense ratio of 16.4%.

In contrast, DJI adheres to a privatized industry-synergistic capital operation, relying on internal funds and investments to build barriers. On one hand, the company cultivates unicorn enterprises like Livox LiDAR through investments, achieving autonomy and controllability of core components. On the other hand, it secures the production capacity of core components like Sony sensors and develops its own chips to promote domestic substitution.

After the aerial "battles" this summer and the "real-world" battles that commenced with the snow season, the market's concern about changes in market share in the niche sectors varies due to differing statistical approaches by research institutions.

Taking panoramic cameras as an example, Frost & Sullivan indicates that in the third quarter, Insta360 held a 75% global market share and over 60% domestically, while DJI had 17.1% globally and 37.1% domestically. During the same period, Merlindata shows that Insta360 had a 49% global market share and 42% domestically, while DJI had 43% globally and 49% in domestic e-commerce channels.

As for the drone sector, where DJI is the core leader, in December, Insta360 officially launched its first panoramic drone, the YINGLING Antigravity A1, with a core positioning of "panoramic + flight," thus entering into competition with DJI.

However, the "duel" between these two giants does not preclude the entry of new players. The Shenzhen-based drone brand XFLOAT may be following in Insta360's footsteps. The company focuses on the "close-up following shot" function, with its main products emphasizing ease of operation. It has become the designated equipment for relevant snowboarding associations and frequently appears in short videos by snowboarding bloggers.

Ultimately, while the duel between Insta360 and DJI generates lively financial headlines, the key lies in consumer experience. Both companies are encroaching on each other's strongholds, and a third party is quietly making its mark. Who will capture consumers' hearts remains to be seen. (Produced by Thinker Finance) ■

Source: Investors Network