Drone Package Delivery Market Size, Share & COVID-19 Impact Analysis, By Type (Fixed Wing, Rotary Wing, and Hybrid), By Package Size (Less Than 2 Kg, 2-5 Kg, and Above 5 Kg), By End-use (Restaurant & Food Supply, E-commerce, Healthcare, Retail Logistics & Transportation and Others), and Regional Forecast, 2021-2028

The global drone package delivery market size was USD 988.9 million in 2020 and is projected to grow from USD 1,522.4 million in 2021 to USD 31,188.7 million by 2028 at a CAGR of 53.94% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. The global impact of COVID-19 has been unprecedented and staggering, with drone delivery services witnessing a positive demand shock across all regions amid the pandemic.

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.

Drone Delivery Service Providers Are Setting an Example Amid COVID-19 Pandemic

Amid the ongoing COVID pandemic, the world has witnessed the expansion of contactless package distribution via various means, but drone delivery has impacted the delivery and logistics market the most. This development occurred due to short-term supply chain disruptions, which led to a higher adoption rate of drone delivery to counter the sluggish growth across domains such as local businesses, restaurants, pathologies, telemedicine providers, and others. Also, this platform is being widely utilized by law enforcement agencies, healthcare service providers, logistics companies, delivery platforms, and e-commerce companies.

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 manufacturers, suppliers, service providers, and other companies operating in the market. Growing demand for contactless delivery systems across supply chains is expected to boost market growth during the forecast period.

Some of the recent instances where drones have been deployed to deliver goods are:

• May 2020 - Silicon Valley-based Zipline International has been working with the U.S. FAA for the drone delivery concept of small pilot projects. The company used fully autonomous drones to deliver 1.8 kg pound cargo at a distance of 80 Km, dropping the package via a parachute for a safe landing. 


• April 2020 – Local government bodies in several Indian cities such as Raipur and Indore carried out sanitization drives through drones. Noida, for example, conducted a sanitization drive-by by spraying disinfectants using drones. Several hospitals, hot spots, and public places were covered in this drive.


• March 2020 – The Irish government announced plans to build proper infrastructure for medical drone delivery services. Manna Aero Company will start the trial in the village of Moneygall. The company is planning to make 100 deliveries per drone across the town. 

LATEST TRENDS

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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.

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 sample deliveries across hospital campuses in North Carolina.

DRIVING 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, and 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.

In 2019, for example, Zipline International signed an 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 providers, 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, 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, evident through the ongoing development of next-generation heavy-lift delivery drones and 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.

SEGMENTATION

By Type Analysis

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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, rotary-wing, and hybrid. The hybrid segment is estimated to grow at the highest CAGR during the forecast period, attributed to the excellent capability of hybrid UAVs for quick vertical take-offs and landings and AI-based collision avoidance detections. Hybrid drones are widely adopted in various commercial and industrial applications due to their operational suitability.

Service providers and logistics companies widely use the multi-copter variants due to their extra payload-carrying capacity under their bodies. Their superior aerodynamic structure and other technological benefits are projected to propel this segment’s growth in the forthcoming years. The fixed-wing segment is projected to grow at the highest CAGR during the forecast period. The growing applications of fixed-wing drones for aerial photography and analysis are fueling their demand in several countries. The increasing demand for long-range UAVs will further drive the segment’s growth in the future. 

By Package Size Analysis

Less Than 2 Kg Segment Dominated Market in 2020

Based on package size, the market is segmented into less than 2 Kg, 2-5 Kg, and above 5Kg. The less than 2 Kg segment dominated the market share in 2020 and is projected to lead the market during the forecast period. The growth is attributed to the timely FAA approvals and regulations favoring the service providers for delivering parcels weighing up to 2 Kg across the U.S. These approvals are necessary for the parcel service providers, especially for food packages and medical emergency supplies in the U.S. These services are suitable in extreme environmental conditions to deliver relief, medical aid, and food supplies.

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 2-5 Kg segment is anticipated to be the second-largest market share and fuel the market growth during the forecast period. The increase is attributed to the regulatory changes in the emerging drone package delivery market across the globe and the development & adoption of higher take-off weight variants of the drone. In June 2020, Drone Delivery Canada Corp. launched the next-generation Sparrow drone with an enhanced range of up to 30 km with a maximum take-off weight of 4.3 kg, which can be used for commercial, healthcare, and residential utilities across the globe.

The above 5 Kg segment is anticipated to grow at the highest CAGR during 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. For instance, in February and April 2020, Drone Delivery Canada Corp launched its new Robin XL and The Condor heavy-lift, long-range delivery platforms with automatic cargo deployment systems. Robin XL has a maximum take-off weight of 11.3 kg & a range of 60 km, while the Condor has a maximum take-off weight of 180 kg & a range of 200 km.

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 healthcare segment is anticipated to have a dominant market share during the forecast period owing to the high demand for medical products, pathological lab samples, vaccines, and medical instruments in various countries. The emergence of numerous healthcare product delivery companies worldwide, such as Zipline, Matternet, Volansi, and Drone Delivery Canada Corp., especially for healthcare delivery services, will drive the demand for drone delivery solutions in the next few years.

Due to the short-term supply chain disruptions, the eCommerce 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 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 372.4 million in 2020. 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 hospitals.

The market in the Asia Pacific is estimated to display 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 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 hard-to-reach places.

KEY INDUSTRY PLAYERS

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 excellent distribution networks in developed and emerging economies. 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, and Matternet, Inc. have also entered the market competition as 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: 

• August 2021 – Altitude Angel, the leading UTM (Unified Traffic Management) technology provider, has signed an agreement for its Global Partnership Programme with JALUX Group to promote and deploy Altitude Angel’s UTM platform to various users.


• July 2021 – Drone Delivery Canada Corp. has signed an agreement with the University of British Columbia (UBC) to deliver a range of cargo under the Remote Communities Transporation Initiative Program to Fraser Lake and Stellat’en First Nation.

REPORT COVERAGE

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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.

Report Scope & Segmentation