The Delivery Drones Market is expected to reach a value of $1.29 billion by 2028, at a CAGR of 40% during the forecast period of 2021–2028. The increasing demand for faster delivery, technological advancements in drones, and the growing need to reduce carbon emissions are the factors driving the growth of the Delivery Drone Market.
In addition, increasing private investments in the drone industry, the rise in e-commerce, and demand for contactless delivery amidst the COVID-19 pandemic are projected to provide significant growth opportunities for the vendors operating in this market.
Impact of COVID-19 on the Delivery Drone 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.
Key Findings in the Delivery Drones Market Study:
Hybrid VTOL Segment to Grow at a Significant Pace During Forecast Period
The hybrid VTOL segment is projected to grow at the highest CAGR during the forecast period. The growth of this segment is attributed to the benefits of multi-rotor platforms with fixed-wing drones and the transition between the two modes during flight. The ability to vertically take-off and land without using any launcher or runway has made hybrid VTOL delivery drones operate in any location.
More than 5 Kg Segment Projected to Grow at Highest CAGR During Forecast Period
The more than 5 Kg segment is expected to grow at the highest CAGR during the forecast period. The growth of this segment is attributed to its use in aerial shipping of packages of more than 5 kg. Delivery drones are utilized for shipping products in rural areas and dense urban areas. These drones can deliver essential supplies during medical emergencies and natural disasters. Hence, these factors boost the adoption of delivery drones.
More than 25 Km Segment to Grow at Highest CAGR During Forecast Period
The more than 25 Km segment is expected to grow at the highest CAGR during the forecast period. The growth of this segment is mainly attributed to drones being used to provide shipping services at distances of more than 25km. These drones are used in various sectors, such as logistics, e-commerce, healthcare, retailer, and food & beverage. The capability of these drones to deliver goods at distances of more than 25km has encouraged various companies to adopt drone services worldwide.
Logistics Segment to Grow at Highest CAGR During Forecast Period
The logistics segment is expected to grow at the highest CAGR during the forecast period. The growth of this segment is mainly attributed to its use in aerial shipments of small packages of commercial goods. Factors such as high speed, door-step delivery, non-requirement of road transportation, and cost-effectiveness are expected to increase the adoption of delivery drones in the logistics sectors.
North America to be the fastest-growing regional market by value
North America is expected to witness the fastest growth during the forecast period. The increasing investments by key players to promote parcel drone delivery service platforms and the increasing government measures to support the use of drone delivery services are the key factors driving the growth of the drone delivery market in North America.
The rising number of ongoing testing trials of delivery drones, rising demand for same-day delivery of medical supplies and e-commerce goods, and various Federal Aviation Administration (FAA) regulatory frameworks set by the governments in North American countries, such as the U.S. and Canada, have increased the adoption of delivery drone technology in the region.
The governments in North America have approved licenses for the operation of package-delivery services using delivery drones to companies, such as Amazon.com Inc, Drone Delivery Canada Corp. (DDC), and Wing Aviation. The approvals by the governments have encouraged various public companies, private companies, and startups to adopt delivery drone services to deliver food & beverages, retail goods, and medical supplies.
Key Players
The report includes a competitive landscape based on an extensive assessment of the key strategies adopted by the leading market participants in the delivery drones market over the last four years.
The key players profiled 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).
Scope of the Report
Delivery Drone Market, by Type
- Multi-rotor
- Fixed-wing
- Single-rotor
- Hybrid VTOL
Delivery Drones Market, By Payload
- Less than 2 kg
- 2-5 kg
- More than 5 kg
Delivery Drones Market, by Range
- Less than 25 km
- More than 25 km
Delivery Drone Market, by End User
- Healthcare
- Retailers and E-commerce
- Food & Beverages
- Logistics
- Other End Users
Delivery Drones Market, by Geography
- North America
- Asia-Pacific
- China
- Japan
- South Korea
- India
- Australia
- Rest of Asia-Pacific
- Europe
- Germany
- U.K.
- France
- Italy
- Spain
- Rest of Europe
- Latin America
- Middle East & Africa
Key Questions Answered in the Report: