Drone Package Delivery Market Size, Share & Industry Analysis, By Type (Fixed Wing and Rotary Wing), By Package Size (Less Than 5 Kg, 5-25 Kg, and Above 25-150 Kg), By End-use (Restaurant & Food Supply, E-commerce, Healthcare, Retail Logistics & Transportation and Others), and Regional Forecast, 2024-2032

The global drone package delivery market size was valued at USD 314.4 million in 2023. The market is projected to grow from USD 472.2 million in 2024 to USD 5,764.5 million by 2032, exhibiting a CAGR of 36.7% during the forecast period. North America dominated the drone package delivery market with a market share of 35.75% in 2023.

Several logistics and transportation companies are making heavy investments in building efficient infrastructure for aerial delivery through drones. Drone delivery is an innovative transportation medium for parcel service providers and various commercial businesses, and medical centers. Due to their accelerated delivery time, high accuracy, and minimal human interventions in the supply chain, it has been the most sought-after logistical methodology in the global supply chain. Technology giants such as United Parcel Service of America (UPS), Zipline, and Deutsche Post DHL Group have set up new platforms for commercial delivery services for the past several years.

For instance, in March 2020, UPS partnered with Wingcopter to develop next-generation cargo drones while adding new capabilities such as transitioning VTOL to fixed-wing forward flight for high speed, long-range, and high take-off weight. These drones will be more capable of serving various industries for different utilities. The pandemic provides a growing space and time for the commercial applications of delivery drones that function smoothly and efficiently. These factors will provide lucrative opportunities to the manufacturers, suppliers, service providers, and other companies operating in the market. Growing demand for contactless delivery systems across supply chains is expected to boost the market growth during the forecast period.

Drone Package Delivery Market Trends

Rising Development of State-of-The-Art Infrastructure and Commercialization of UAV Services Ecosystem to Fuel Demand for Drones

Increasing carbon footprint and global warming are two of the world's biggest challenges at present, along with the ongoing COVID-19 pandemic. In such a dire scenario, drone delivery is ideal for reducing carbon emissions through commercial drone-based delivery, specifically for the last-mile delivery (LMD) of various products. The increasing focus from the government towards streamlining and introducing regulations for commercial drone usage is further promoting companies to introduce drones for delivery operations.

In 2019, for example, UPS Logistics became the first commercial company to receive a certification from the U.S. Federal Aviation Authority (FAA) to operate its "Drone Airline." The company has built a drone delivery network for hospital campuses across the U.S. Matternet's M2 drone has been the chosen platform for UPS's drone delivery network, which has completed 1850 pathological samples deliveries across the hospital campuses in North Carolina.

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Drone Package Delivery Market Growth Factors

Rising Demand for Faster and Safer Package Delivery among Various Factors to Drive Market Growth

The increasing adoption of UAVs in commercial applications in core sectors such as agriculture, logistics & transportation, and healthcare is projected to fuel the demand for drone delivery services during the market forecast period. High demand for same-day faster delivery with enhanced charges, the technological developments in heavy-lift drone-based delivery are the factors anticipated to propel the market growth for the global market. Additionally, the higher adoption rate of drone delivery for eCommerce, local businesses for market expansion, healthcare ecosystem for higher patient response rate, and supply of life-saving drugs and reports are also the factors influencing the drone package delivery market growth. The expansion of last-mile delivery operations in various established regions is expected to fuel market growth as E-commerce companies and logistics services aim to introduce smart tech and robotics innovation into their daily fleet operations.

In 2019, for example, Zipline International signed a MoU with the Health Ministry of Ghana to offer a drone-enabled supply chain solution. The automated logistics company will provide services 24/7 in all weather conditions, serving the needs of over 2000 hospitals and clinics. Over 12 million people will get benefited from healthcare workers and medical staff. Several startup drone companies transform delivery services for online shopping, food ordering, and personal packages. E-commerce companies are focused on improving their last-mile delivery capabilities by investing in drone technology. The emergence of automated delivery systems will further fuel market growth in the foreseeable future.

Huge Private Investments in UAV Industry to Propel Growth

The drone package delivery utilities are anticipated to expand the market growth opportunities for various drone delivery industry stakeholders, such as drone OEMs, service providers, drone as a software service provider, drone flight infrastructure providers, and others. The drone manufacturing companies focus on developing cost-effective components and technologies capable of carrying heavy payloads over long distances, such as transitioning from VTOL to fixed-wing forward flight, unified aerial traffic management systems, and various cloud-based services.

For instance, in August 2021, Altitude Angel, the leading global UTM (Unified Traffic Management) technology provider, has partnered with JALUX Group to establish Altitude Angel's GuardianUTM. This partnership will enable drone-based delivery to be more streamlined in both unsegregated and integrated air-space to deliver life-saving medical products and commercial cargo delivery.

According to Droneii.com, the industry witnessed record-breaking investments, surpassing USD 1.2 billion in 2019. The investment share of venture capitalists accounted for USD 830 million in 2019. These companies are confident in the enormous profit-making opportunities existing in the market and are projected to propel the growth of this market in the future years.

RESTRAINING FACTORS

High Infrastructural Cost to Restrict Adoption of Drone Package Delivery for Market Growth

The drone-based product and services ecosystem is still in the evolutionary stage, which is evident from the ongoing development of next-generation heavy-lift delivery drones and the high operational costs due to recent technological adoption. With the absence of more defined government regulations and restricted flight limitations, the higher infrastructural cost is valid due to the requirement of many drone flight instructors to cater to the last-mile delivery to satisfy the customers' needs. The non-availability of charging stations, micro-fulfillment stations, and drone flight operations centers in these economies are expected to grow over the forecast period. The adoption of drone fleets can cost significantly more, which is one of the major factors affecting the growth adoption on a large scale basis. Scheduled maintenance and the possibility of theft are also other secondary factors that contribute to market restraint.

Drone Package Delivery Market Segmentation Analysis

By Type Analysis

Hybrid Drone Segment to Propel Market Growth at a Fast Pace Owing To VTOL Capabilities and AI-based Collision Avoidance

Based on drone type, the market is segmented into fixed-wing and rotary-wing. The fixed-wing segment is estimated to grow at the highest CAGR during the forecast period, attributed to the increasing adoption of fixed drone usage in the delivery due to its aerodynamic body, which makes it highly suitable to glide through the air. Their superior aerodynamic structure and other technological benefits are projected to propel this segment's growth in the forthcoming years.

The rotary wing segment dominated its market share in 2023, and it's expected to continue its market share throughout the forecast period. The increasing consumer preference towards rotary wing drones due to higher reliability and easy take-off functions is expected to drive the market growth.

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By Package Size Analysis

5 - 25 Kg Segment Dominated Market in 2023

Based on package size, the market is segmented into less than Less Than 5 kg, 5-25 kg, and above 25 -150 kg.

The less than 5-25kg segment dominated the market share in 2023 and is projected to grow at a fast pace during the forecast period. The growth is attributed to increasing technological innovation, and the carrying capacity of drones throughout the years has significantly increased, which has led to the moderately heavy carrying of goods. Thus contributing to market growth.

In October 2019, for example, UberEats revealed a new look for its drones used to provide food products. The company will use its innovative rotating wing unmanned aerial vehicle with six rotors. The legal cargo capacity is for two meals, and the design has passed the "critical design review" test. The FAA permitted flight delivery testing in San Diego.

The above 25 -150 kg segment is anticipated to be the fastest-growing segment throughout the forecast period. The growth is attributed to the technological advancement in drone technology across the drone manufacturers owing to the high demand for heavy-lift capabilities, multi-drop cargo delivery systems, and the adoption of favorable drone-related regulations by governments worldwide.

By End-use Analysis

Healthcare Segment to Register a High CAGR to Boost Market Growth of Market

The market is segmented into restaurant & food supply, e-commerce, healthcare, retail logistics & transportation, and others in terms of end-use.

The restaurant and food supply segment is anticipated to have a dominant market share during the forecast period owing to the high demand for food delivery products. Raw food materials such as grains, wheat, and rice getting delivered in bulk is expected to drive market growth. Furthermore, increasing integration of drone delivery services in urban and metro regions from leading food delivery giants like Uber. The market is expected to witness significant expansion throughout the years.

Due to the short-term supply chain disruptions, the e-commerce industry has relied upon the contactless delivery system to cater to the customer needs of various products amid the ongoing COVID-19 pandemic. The growing adoption of online food retail platforms, ready-to-eat meals, and food delivery services is projected to drive the market growth of the restaurant & food supply segment during the forecast period due to the development of quicker delivery drones. The retail logistics and transportation segment is anticipated to grow during the forecast period, which is attributed to the heavy-lift delivery platforms by drone OEMs.

REGIONAL INSIGHTS

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The market size in North America stood at USD 112.4 million in 2023. This region's dominance in drone package delivery market share is attributable to the rising trend of online shopping on e-commerce platforms and advantageous FAA regulations in the U.S. The growth in investments from vital players such as Zipline, FedEx, UPS, Matternet, Volansi, Wing, and others to sustain startup companies for founding parcel service platforms in the region will assist the region's dominance in the market share during the forecast period.

The market in Europe is anticipated to grow at a steady CAGR during the forecast period. The major technology-based companies and many drone-based delivery providers have gained a strong presence in Europe through partnerships and collaborations. For instance, in July 2020, the Scotland-based drone service provider, Skyports, partnered with the technology giants, Vodafone and Deloitte, to start new medical delivery services for supplies, samples, medicine, and specimens in the hospitals.

The market in the Asia Pacific is estimated to display a healthy growth owing to the surging demand for online food purchases among the vast population. The popular trend of online grocery purchases in developing nations such as India, China, and Indonesia will drive regional market growth in the upcoming years.

For instance, In May 2020, India's Ministry of Civil Aviation (MoCA) unveiled a novel portal, GARUD, to offer provisional exceptions to drone companies. Such initiatives will open fresh growth avenues for drone service providers.

Latin America and the Middle East & Africa are expected to display a robust CAGR due to the emergence of drone startups across these regions. For instance, in February, Zipline has agreed with Nigeria's Kaduna State Government to utilize the drone delivery system for the healthcare supply chain, higher patient response rate, and the delivery of life-saving vaccines, blood samples, and medical products to the hard-to-reach places.

List of Key Companies in Drone Package Delivery Market

Strong Collaborations, New Partnerships, and Acquisitions are Key Strategies Adopted in Global Market

Key players in the market are mostly technology-based companies with strong product portfolios and an excellent distribution network in developed and emerging economies. The major companies such as Zipline International, UPS, and Deutsche Post DHL Group are expected to lead the market, accounting for a dominant share during the forecast period. However, the rising number of startup companies projected to enter the competition milieu of this market may threaten the apex position of large companies.

Other key players such as FedEx, Bowing, Flirtey, Drone Delivery Canada Corporation, Matternet, Inc. have also entered the market competition and other smaller companies. The introduction of low-cost services and accurate and safe transportation are key factors affecting the market scenario. Strategic partnerships with retailers, wholesalers, and technology-based companies are expected to strengthen the profiles of the new participants in this market.

LIST OF KEY COMPANIES PROFILED:

• Amazon Inc. (Seattle, Washington, U.S.)


• FedEx (Memphis, Tennessee, U.S.)


• UPS Flight Forward Inc. (Atlanta, Georgia, U.S.)


• Deutsche Post DHL Group (Bonn, Germany)


• Matternet Inc. (Mountain View, California, U.S.)


• Zipline Inc. (South San Francisco, California, U.S.)


• Flirtey Holdings Inc. (Reno, Nevada, U.S.)


• Drone Delivery Canada Corp. (Vaughan, Ontario, Canada)


• Flytrex Aviation Ltd. (Tel Aviv, Israel)


• Workhorse Group Inc. (Loveland, Ohio, U.S.)


• Wing Aviation LLC (Mountain View, California, U.S.)


• Skycart Inc. (San Jose, California, U.S.)


• Altitude Angel Limited (Reading, U.K.)


• Manna Drones Inc. (Dublin, Ireland)


• Wingcopter GmbH (Darmstadt, Hessen, Germany)


• Volansi Inc. (Concord, California, U.S.)


• Swoop Aero Pty. Ltd. (Docklands, Victoria, Australia)

KEY INDUSTRY DEVELOPMENTS:

• October 2023 – Amazon announced that the company will introduce its latest prime air drones, which will be used for the delivery of parcels for customers at three locations in the U.S. along with a few cities in Italy and the U.K. The company also aims to expand its drone delivery fleet in the coming years.


• September 2023 – United Parcel Services (UPS) recently announced that the company received a green signal from the U.S. regulation office for the use of delivery drones to fly for longer distance flights, which will be flown beyond the sight of ground operations.

REPORT COVERAGE

An Infographic Representation of Drone Package Delivery Market

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The drone package delivery market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the developed market over recent years.

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