Woofun AI reports that the consumer electronics sector has shifted its primary battleground from patent litigation to direct retail confrontation, evidenced by the June 23 launch of DJI's Osmo Pocket 4P at a starting price of 3,799 yuan. Despite the official release, immediate stock shortages occurred in DJI stores across numerous Chinese cities, highlighting the intense demand and supply friction in the physical channel. Simultaneously, on June 22, Insta360 confirmed to investors on an interactive platform that its global distribution strategy now relies on a hybrid model of online and offline channels, signaling a strategic pivot away from pure e-commerce dependency.

While the tech media has fixated on the legal skirmishes between DJI and Insta360 spanning from the Shenzhen Intermediate People's Court to tribunals in Texas, USA, regarding drone and panoramic camera patents, a more tangible conflict is unfolding in physical storefronts. The core of this rivalry has evolved beyond intellectual property to encompass distribution partners, product assortments, and geographic store placement. This transition marks the beginning of a direct confrontation in customer perception and channel control, where the outcome will likely dictate the long-term growth trajectories of both Shenzhen-based giants. For the industry, online sales drive short-term volume, but offline operations define enduring market trends, making the retail war the decisive factor for future dominance.

Insta360 has executed a rapid expansion strategy, increasing its store count by 50-fold in just three years, a move that directly challenges DJI's decade-long establishment in the offline sector. The necessity of physical presence is underscored by smartphone brands, which maintain hundreds of thousands of stores to transition smart hardware from niche enthusiast markets to the mainstream. DJI has spent nearly ten years cultivating one of the most mature retail networks for consumer-grade imaging in China, boasting over 700 authorized retail and experience stores. These locations span from core business districts in first-tier cities to digital stores in third- and fourth-tier cities, achieving a channel penetration depth far exceeding the industry average.

In stark contrast, Insta360's offline journey began much later, with only five exclusive stores in China at the start of 2023, relying almost exclusively on online channels and third-party retailers. By 2024, the sales mix had shifted dramatically to a near 1:1 ratio between online and offline channels. Specifically, online sales through the official website and mall accounted for 18.81%, while third-party e-commerce platforms contributed 24.39%. Offline sales, primarily driven by distributors, made up 44.37% of the total. By the end of 2025, the number of Insta360's exclusive stores had surged to nearly 300, achieving full coverage of all first- and second-tier cities in China. This aggressive scaling reflects a determined effort to seize market control and meet the growing demand for in-person product experiences.

Li Qingchi, the head of sales for Insta360's China region, articulated the strategic rationale behind this expansion, stating, "The main reason for opening larger stores is to meet the needs of our customers. Our user base is constantly growing, and more and more customers want to experience our products in person in their local areas. They also expect our stores to offer a wider range of products and better after-sales service. This flagship store is precisely designed to fulfill these expectations." Industry observer Li Ming noted that this approach aims to transition Insta360 from a high-quality hardware manufacturer to a recognized brand by leveraging offline experiences. Given that Insta360 competes with DJI across action cameras, panoramic cameras, and consumer-grade drones, matching DJI's product lines necessitates a rapid expansion of the store network to remain competitive.

Financial performance validates this strategic shift, with Insta360's revenue growing by more than 80% in the first quarter of 2025. The fastest-growing segment remains the consumer-grade panoramic camera category, driven by key products such as the Insta360 X5, Insta360 X4 Air, and Antigravity A1 drones. Since these products rely heavily on user experience factors like shake reduction, grip comfort, and ease of operation, expanding the physical store network is essential to close the "last mile" between the brand and the public. Last year, Insta360's total operating revenue reached 9.858 billion yuan, representing a year-on-year increase of 76.85%. This growth is inextricably linked to the company's investment in retail infrastructure, including the recruitment of former DJI employees to bolster operational capabilities.

In the second half of 2025, Insta360 recruited Zhang Bo, who previously managed sales for DJI in the China region. Zhang Bo brings extensive experience in managing DJI's distributor system and possesses deep knowledge of channel management and dealer operations.

Concurrently, the company is enhancing its physical store management capabilities by hiring regional retail managers, store managers, and training instructors. These roles cover channel development, store operations, staff training, and regional marketing, aiming to build a comprehensive offline retail management system.

Woofun AI data shows sales expenses accounted for 18.1% of total revenue in the first quarter of 2025, a 60% increase compared to the previous quarter. For the full year of 2025, sales expenses totaled nearly 1.68 billion yuan, a net increase of 850 million yuan compared to the same period in 2024, effectively doubling the expenditure.

A detailed breakdown of 2025 sales expenses reveals that market promotion costs rose by 145.5%, property depreciation expenses such as rent increased by 92.7%, and employee salaries grew by 91.9%. Almost all expense categories outpaced revenue growth, indicating significant capital investment in expansion. Although earnings reports do not specify the exact cost of store network expansion, industry insiders note that opening new stores involves complex processes including partner selection, site location, construction, supplier introduction, and facility investment. These are critical expenditures for any brand manufacturer seeking to establish a physical footprint.

However, merely increasing store numbers is insufficient; the appropriateness of channel strategy, operational efficiency, and the health of the dealer system are far more critical determinants of success.

Insta360 faces both advantages and challenges in this expansion. While it must learn from DJI's channel experience, it also needs to develop more flexible policies and precise strategies. Both companies utilize similar provincial-level agency distribution models and adhere to strict brand standards for store location, decoration, and display. DJI, with its longer history, maintains a solid foundation, often restricting new dealer entry in certain areas to existing partners. DJI's expansion plans require strict approval for site selection and enforce specific performance metrics for experience stores, exclusive stores, and comprehensive stores, with underperforming dealers facing replacement. DJI's network is characterized by a mix of agency and direct-operated stores, strict partner control, and high entry barriers, currently focusing on optimizing existing locations.

Insta360's strategy is distinctly offensive, leveraging newly recruited DJI channel professionals to adopt proven systems. While some smartphone industry models allow one dealer to represent multiple brands, top-tier dealers are unlikely to represent both DJI and Insta360 simultaneously due to varying local conditions. Although Insta360's recruits bring mature management methods, they cannot directly appropriate DJI's core dealer resources. For major dealers, DJI remains the primary partner, though some may view Insta360 as a valuable addition. From a dealer perspective, DJI offers high brand recognition, stable traffic, and strong customer willingness to pay, while Insta360 offers rapid expansion and an increasingly diverse product range. In key business districts like Chengdu's Chunxi Road and Shanghai's Huaihai Road, the distance between Insta360 and DJI stores has narrowed, allowing consumers to easily compare products, a shift from their previously independent market operations.

The intensity of this competition was highlighted last year when an Insta360 store signboard in Changsha was removed due to an alleged "exclusive agreement." Insta360 founder Liu Jingkang described this incident as "just the tip of the iceberg of the challenges we face at different levels," underscoring the fierce market rivalry. To gain an edge, Insta360 is adopting differentiated approaches, such as opening the world's largest city flagship store in Shenzhen's Yifang City. This location features a new design embodying the "Think Bold" philosophy and includes the first 360-degree panoramic model in China, realistically reproducing scenarios like cycling and skiing. It also implements an 'integration of sales and after-sales service" model, allowing customers to receive a new device within ten minutes after inspection, creating a closed-loop experience from exploration to purchase to service. Insta360 plans to open another 10 city flagship stores this year, aiming to make after-sales service as convenient as purchasing.

Despite these innovations, DJI retains a clear advantage in total store count, making the primary challenge for Insta360 to catch up at the dealer level. This competition extends beyond China to the global market, where both companies view overseas expansion as key to future growth. In 2025, Insta360's overseas revenue reached 6.676 billion yuan, accounting for 69.03% of total revenue, with products sold in over 100 countries and regions. DJI holds more than 70% of the global consumer-grade drone market share, with industry experts estimating that overseas revenue constitutes approximately 80% of its total. In the handheld gimbal camera category, long dominated by DJI's Pocket series with shipments exceeding 10 million units, Insta360's Luna Ultra represents a direct entry into DJI's core profit area.

Global shipments of handheld smart cameras reached 16.65 million units in 2025, an 83% year-on-year increase. DJI ranked first with a 62.4% market share, followed by Insta360 with 20.4%. As Insta360 enters DJI's core territory, conflicts in physical stores are likely to intensify. Similar to the early days of domestic smartphone expansion, online channels can quickly reach core enthusiasts, but penetrating the mainstream requires a localized retail network. Insta360's retail network now covers more than 10,000 stores globally, with deep partnerships with Apple Store, Best Buy, B&H, and Suning. DJI's global network, established earlier, covers a wider range of countries with mature agent systems and brand stores in major European and American markets, maintaining a more established offline presence.

The ultimate test in global offline competition is operational efficiency. DJI's decade of experience has yielded a mature supply-chain and channel coordination system, with single-store operation efficiency and inventory turnover rates among the best in the industry. Insta360, still in the expansion phase, requires significant investment in channel development, and its operational scale effects remain to be observed. For Insta360, the key challenge is shifting from rapid store expansion to refined operations, establishing stable dealer systems in mature markets, and converting store numbers into actual sales and brand recognition. For DJI, the challenge lies in maintaining channel advantages in mature markets while leading in emerging markets and using efficiency to offset competitors' speed.

The channel and store competition between DJI and Insta360 will persist, with the victor determined by the ability to transform technological advantages into retail strengths and product capabilities into brand power. The retail battles between these two entities are poised to intensify further in the coming years. This marks a definitive shift where physical presence becomes the primary differentiator in a market previously defined by online agility and patent disputes.