Delivery Drones Market is Expected to Reach $1.29 Billion by 2028, at a CAGR of 40%

 

According to a new market research report titled “Delivery Drones Market by Type (Multi-rotor, Fixed-wing, Hybrid VTOL), Payload (Less than 2 KG, 2–5 KG), Range (Less than 25 km, More than 25 km), End User (Healthcare, Retailers and E-commerce, Logistics), and Geography — Global Forecasts to 2028”, the delivery drones market is expected to grow at a CAGR of 40.0% from 2021–2028 to reach $1.29 billion by 2028.

A delivery drone is an unmanned aerial vehicle mainly used to deliver packages, medical supplies, food, or other goods. These drones provide contactless and same-day delivery of parcel packages. The use of delivery drones to deliver packages has resulted in lower energy per kilometer consumption compared to traditional modes of delivery, such as delivery trucks.

The increasing need to reduce carbon emissions has rapidly increased the adoption of delivery drones. Drones can deliver blood, vaccines, birth control, snakebite serum, and other medical supplies to rural areas and reach patients who require immediate medical attention within minutes. Also, the increasing demand for on-time delivery of products, such as groceries, medicines, postal deliveries, and retail goods, is expected to increase the demand for delivery drones in the future.

In addition, increasing private investments in the drone industry, the rise in e-commerce, and the growing demand for contactless delivery amidst the COVID-19 pandemic are projected to provide significant growth opportunities for the vendors operating in this market. However, stringent government regulations for UAVs and security breaches using aerial delivery drones pose a major challenge for the growth of the delivery drones market.

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Impact of COVID-19 on the Delivery Drones Market

The outbreak of the COVID-19 pandemic emerged towards the end of December 2019 in Wuhan, China. The pandemic had a major impact on all industries globally, with numerous industries completely shutting down manufacturing operations following the directives issued by local governments or operating at minimal capacities to keep personnel safe. The revenues of major companies decreased significantly due to halted operations. The reduced economic activity and operations severely impacted e-commerce, logistics, and healthcare supply chain deliveries globally.

To avoid overcrowding at supermarkets and medical stores, governments across various countries imposed nationwide lockdowns and social distancing norms. These regulations created a wide range of opportunities for drone delivery services in the medical sector. In order to promote drone delivery services, the Federal Aviation Administration (U.S.) is speeding up the approvals for these services to help during the COVID-19 pandemic in the U.S. The main purpose of these approvals is to offer drone delivery services for food and medical items.

The COVID-19 pandemic resulted in the need to use delivery drones for automatic, contactless delivery services in remote islands, mountainous areas, and within some parts of cities. These factors are expected to increase the demand for delivery drones during the forecast period.

The rising demand for non-contact services during the COVID-19 pandemic has encouraged the Government of South Korea to speed up the testing trials of delivery drones for food deliveries across the country. According to the Ministry of Land, Infrastructure, and Transport, a test was held in the administrative city of Sejong, demonstrating the five drones delivered meals and other products to people at homes two to three kilometers away across a lake and high-rise buildings within 10 minutes.

Similarly, the southern state of Telangana, a part of the World Economic Forum’s (WEF) Medicine from the Sky project, NITI Aayog, and Apollo Hospitals plans to run a trial for delivering medicines using drones.

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Increase in Demand for Faster Delivery

The rising demand for quick and same-day delivery has increased the demand for delivery drones globally. The rising adoption of online shopping among consumers has increased the demand for advanced shipping options that provide faster delivery services. The time-saving benefits and home delivery services of products purchased online are continuously driving the growth of delivery drones worldwide. In the past few years, the rising number of instant parcel deliveries to the door-steps of consumers has encouraged leading companies to support the use of delivery drones for faster and same-day deliveries.

The ability to carry and deliver packages for a long distance in a short duration using delivery drones has created significant opportunities for faster delivery of food & beverages, medicines, and retail goods. To avoid overcrowding at supermarkets and pharmacies, numerous companies have started launching drone delivery services to provide efficient delivery. Drone technology is used across quick-service restaurants, healthcare, logistics, and various e-commerce companies.

Companies such as United Parcel Service of America, Inc., Amazon.com Inc., Boeing, Zipline, Wing Aviation LLC, and Flytrex have started offering drone delivery services for retailers, e-commerce marketplaces, restaurants, and delivery companies. These companies have partnered with the local shops to deliver the packages to their customers quickly and on the same day i.e. within 30 minutes.

Furthermore, various companies have started collaborating to support the growing demand of the drone delivery market globally. For instance, Wing Aviation LLC, a division of Alphabet, partnered with FedEx and Walgreens, as well as local businesses to deliver small packages weighing up to 1.5 pounds or less. The company offers a small drone and OpenSky navigation system to deliver fresh foods, medicines, and household items to its consumers.

Also, in 2020, United Parcel Service of America, Inc., Flight Forward, and CVS partnered to deliver prescription medicines from a CVS pharmacy to The Villages, Florida, the largest U.S. retirement community. UPS has also partnered with Wingcopter GmbH to develop a next-generation of package delivery drones.

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To provide efficient analysis, Meticulous Research® has segmented this market based on type (multi-rotor, fixed-wing, single-rotor, hybrid VTOL), payload (less than 2 Kg, 2-5 Kg, more than 5 Kg), range (less than 25 Km, more than 25 Km), end user (healthcare, retailers & e-commerce, food & beverage, logistics, other end users), and geography.

Based on type, the delivery drones market is segmented into multi-rotor, fixed-wing, single-rotor, and hybrid VTOL. The multi-rotor segment accounted for the largest share of the delivery drones market in 2021. The large market share of this segment is attributed to its ability to operate in a wider variety of environments. These drones can hover in a fixed position and fly in any direction and are used to deliver services across the healthcare, logistics, and retail sectors.

Based on payload, the delivery drones market is segmented into less than 2 Kg, 2–5 Kg, and more than 5 Kg. The less than 2 Kg segment accounted for the largest share of the delivery drones market in 2021. The large market share of this segment is attributed to its capability to expeditiously deliver small packages of up to 2 kg. This category denotes the provision of small grocery, coffee, postal delivery, gifts, healthcare and wellness products, and commercial goods under a specific weight limit.

Based on range, the delivery drones market is segmented into less than 25 Km, and more than 25 Km. The less than 25 Km segment accounted for the largest share of the delivery drones market in 2021. Drone delivery caters to rural and dense urban areas, reduces manual involvement and shipping expenses, and enables door-step delivery and service expansion in areas lacking infrastructure. Thus, these factors contribute to the large market share of this segment.

Based on end user, the delivery drones market is segmented into healthcare, retailers & e-commerce, food & beverage, logistics, and other end users. The retailers & e-commerce segment accounted for the largest market share in 2021. The dominant position of this segment is attributed to the capability of delivery drones to deliver small packages of commercial goods faster than traditional modes of delivery. High delivery speed, door-step delivery, and the potential to serve rural and semi-rural areas are the factors increasing the adoption of delivery drones.

Based on geography, this market is segmented into five major regions: North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. Asia-Pacific accounted for the largest share of the delivery drones market in 2021. The large market share of this region is attributed to the rising number of customers switching from offline shopping to online shopping platforms and increasing partnerships between various local traders and leading e-commerce companies.

The growing adoption of delivery drones in countries such as China, South Korea, and Japan has boosted the demand for delivery drones in the APAC region. Furthermore, the demand for delivery drones is expected to increase in Asia-Pacific due to the rapid growth of online shopping platforms, which increases the demand for instant parcel delivery.

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Key Players

The key players operating in the delivery drones market are Amazon.com Inc (U.S.), Boeing Co (U.S.), Airbus SE (Netherlands), Drone Delivery Canada Corp (Canada), Wing Aviation LLC (U.S.), Flirtey (U.S.), Zipline (U.S.), Wingcopter GmbH (Germany), FLI Drone (U.S.), Flytrex Inc (U.S.), Matternet Inc (U.S.), Deutsche Post DHL Group (Germany), United Parcel Services (U.S.), SF Express Co. Ltd. (China), and Rakuten Group Inc (Japan).

 

 

 

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