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Drone Package Delivery Market Size, Share & COVID-19 Impact Analysis, By Type (Fixed Wing and Rotary Wing), 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, 2020-2027

Region : Global | Format: PDF | Report ID: FBI104332

 

KEY MARKET INSIGHTS

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The global drone package delivery market size was USD 642.4 million in 2019 and is projected to reach USD 7,388.2 million by 2027, exhibiting a CAGR of 41.8% during the forecast period.


The growing demand for the quick and fast delivery of goods is projected to fuel the growth rate of this market in the forthcoming years. Several logistics and transportation companies are making heavy investments in building efficient infrastructure for aerial delivery through drones. Unmanned Aerial Vehicles (UAVs) are an innovative transportation medium for parcel service providers due to their accelerated delivery time, high accuracy, and minimal human interventions in the supply chain. Technology giants such as Google, Amazon Prime Air, and DHL have been setting up new platforms for commercial delivery services for the past several years. In 2019, for instance, Amazon submitted an application to the US Federal Aviation Authority (FAA) for the approval and certification to deliver goods and packages of less than 5 pounds in low-density population areas. The company also demonstrated a new electric delivery from drones with a 5-pound load supplied within half an hour up to 15 miles.


Drone Delivery Service Providers are Setting an Example amid the COVID-19 Pandemic


Prominent and emerging goods delivery technologies such as unmanned aerial systems are playing a critical role during the COVID-19 pandemic. These devices are being widely utilized by law enforcement agencies, healthcare service providers, logistics companies, delivery platforms, and e-commerce companies. During the pandemic, drones have been used to supply medical aid, food & meals, and COVID-19 samples in various countries. The pandemic is providing 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. Increasing demand for contactless delivery systems across supply chains is expected to boost the drone package delivery 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 small pilot projects' drone delivery concept. 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 spraying disinfectant using drones. Several hospitals, hot-spots, and public places were covered in this drive.

  • April 2020 – South Korea undertook several disinfection activities in Daegu city through UAVs. The authorities spread around 2.5 gallons of disinfectant, covering approximately 105,000 sq feet of the city.

  • March 2020 – The Irish government announced plans of building 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 village.  


LATEST TRENDS


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Rising Demand for Faster and Safer Package Delivery 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 package delivery services during the market forecast period. 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 served by healthcare workers and medical staff.


UAVs are capable of delivering packages speedily as well as reducing transportation and human costs associated with these services. Several startup drone companies are transforming delivery services for platforms such as 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.


DRIVING FACTORS


Rising Commercialization of UAV Services to Fuel Demand for Drones


Increasing carbon footprint and global warming are two of the biggest challenges facing the world at present. In such a dire scenario, drone delivery is proving to be an ideal solution to reduce carbon emissions through commercial, unmanned air transportation, specifically for last-mile delivery (LMD) of goods. In 2019, for example, UPS Logistics became the first commercial company to receive a certification from the US Federal Aviation Authority (FAA) to operate its “Drone Airline.” The company will build a drone delivery network for hospital campuses across the U.S. The permitted speed for a drone is 43mph and the allowed payload capacity is up to five pounds. The several benefits offered by such services include the faster supply of goods, low-cost operations, and less human resource usage. This will encourage small drone companies to collaborate with larger entities, leverage their supply service platforms, and strengthen their presence in the market. 


Huge Private Investments in the UAV Industry to Propel Growth


Technological developments are expected to have a huge impact on the drone industry. Unmanned aerial delivery drones are equipped with sophisticated technologies as they incorporate several engineered materials, including numerous moveable parts, components, hardware, and software. Therefore, drone manufacturing companies are focusing on developing cost-effective components and technologies capable of carrying heavy payloads over long distances.


The UAV industry is experiencing heavy investments from private companies, venture capitalists, and financial institutions over the past few years. 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 large profit-making opportunities existing in the market and are projected to propel the growth of this market in the future years.


RESTRAINING FACTORS


Stringent Government Regulations and Lack of Air Traffic Management to Limit Product Adoption


Unmanned aerial systems and flight operations entail high-risk air travel beyond the line of sight. Their operation over long distances increases the probability of accidents, property damage, and huge economic losses for companies. Several countries have stringent regulations for UAV deployments, especially near airport areas due to the lack of air traffic management systems, which may hamper the future market growth. The transport of goods via air requires various platforms and infrastructures for the smooth conduct of flight operations.


The unmanned aerial system industry has been experiencing a lack of trained operators for several years now and the lack of training and certification institutes has only compounded this issue. Moreover, the complex terrains in various parts of the world are difficult to deploy air transportation services. Developing countries do not have the proper distribution infrastructure required for  UAVs. These factors will hinder the growth of the market during the forecast period.


SEGMENTATION


By Drone Type  Analysis


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Fixed Wing Drone Segment to Grow at a Fast Pace 


Based on drone type, the market segments include fixed-wing drones and rotary-wing drones. The rotary-wing drones segment held a dominant share of the market in 2019. Its dominance is due to the excellent capability of rotary-wing UAVs for quick take-offs and landings. Multi-copter or multi-rotor drones are widely adopted in various commercial and industrial applications due to their operational suitability. The multi-copter variants are widely used by service providers and logistics companies 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 related to the fixed-wing type of drones for aerial photography and analysis are fuelling 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 the Market in 2019


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 2019 and is projected to lead the market during the forecast period. The segment's dominance is due to the timely FAA approvals and regulations favoring the service providers for the delivery of 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 packages, medical aid, and food supplies. In October 2019, for example, UberEats revealed the new look for its drones used in the delivery of food products. The company will use its innovative rotating wing unmanned aerial vehicle with six rotors. The permitted cargo capacity is for a meal for two, and the design has passed the “critical design review” test. The FAA permitted flight delivery testing in San Diego.


By End-use Analysis


Healthcare Segment to Register a High CAGR


In terms of end-use, the market is segmented into restaurant & food supply, e-commerce, healthcare, retail logistics & transportation, and others.  The restaurant & food supply segment is expected to have a dominant market share during the forecast period owing to the increasing demand for food delivery services in various countries. The emergence of numerous food delivery companies in the U.S., such as DoorDash, Uber Eats, and GrubHub, especially for restaurant food delivery services, will drive the demand for drone package delivery solutions in the next few years. Growing adoption of online food retail platforms, ready-to-eat meals, and food delivery services are projected to drive market growth during the forecast period.


REGIONAL INSIGHTS


North America Drone package delivery Market Size, 2019 (USD Million)

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The market size in North America stood at USD 237.7 million in 2019. This region's dominance in the drone package delivery market share is attributable to the increasing trend of online shopping on e-commerce platforms and favorable FAA regulations in the U.S. The rise in investments from key players to support start-up companies for establishing parcel service platforms in the region will aid the dominance of the region in the market share during the forecast period.


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


The market in Asia Pacific is expected to exhibit healthy growth due to the increasing demand for online food purchases among the huge population. The rising trend of online grocery purchases in emerging economies such as India, China, and Indonesia will drive the regional market growth in the upcoming years. In May 2020, for instance, India’s Ministry of Civil Aviation (MoCA) launched a new portal, GARUD, to provide conditional exemptions to drone companies. Such initiatives will open new expansion avenues for drone service providers.


Latin America and the Middle East & Africa are expected to display a strong CAGR due to the emergence of drone startups across these regions.


KEY INDUSTRY PLAYERS


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


Key players in the market for drone package delivery are mostly technology-based companies that have strong product portfolios and a remarkable distribution network in developed and emerging economies. The major companies such as Zipline International, Amazon, and DHL 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., and DroneScan have also entered the market competition, along with 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. (The US)

  • FedEx (The US)

  • United Parcel Service of America, Inc. (The US)

  • Boeing (The US)

  • DHL International GmbH (Germany)

  • Matternet, Inc. (The US)

  • Zipline (The US)

  • Flirtey (The US)

  • Drone Delivery Canada Corp. (Canada)

  • Flytrex (Israel)

  • Workhorse Group Inc. (The US)

  • Cheetah Logistics Technology (The US)

  • Wing Aviation LLC (The US)

  • DroneScan (South Africa)

  • Other Players


KEY INDUSTRY DEVELOPMENTS:



  • February 2020 –Chinese technology company XAG announced a 5 million Yuan fundraiser for the coronavirus response center. The company also provided drone disinfection operations in China to curb the spread of COVID-19 in various villages. 

  • August 2020 – Amazon received positive approval from the FAA to operate its drone delivery fleet called Prime Air. The company received full certification, which comes under Part 135 of the FAA regulations. The permission gives Amazon the ability to carry small drones for “beyond visual line of sight” operations and serve its customers.

  • April 2020 – Alphabet-owned drone company, Wing, has recorded around 1000 deliveries in Australia between February and April. The company has collaborated with several shops and retailers in Virginia (USA), Australia, and Finland.


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 advanced market over recent years.


Report Scope & Segmentation











































 ATTRIBUTE



  DETAILS



Study Period



  2016-2027



Base Year



  2019



Forecast Period



  2020-2027



Historical Period 



  2016-2018



Unit



  Value (USD Million)



Segmentation



By Type



  • Fixed Wing

  • Rotary Wing



By Package Size



  • Less Than 2 Kg

  • 2-5 Kg

  • Above 5 Kg



By End-use



  • Restaurant & Food Supply  

  • E-commerce

  • Healthcare

  • Retail Logistics & transportation  

  • Others



By Geography



  • North America (The U.S. and Canada)

  • Europe (The U.K., Germany, France, Italy, Spain, Russia, and Rest of Europe)

  • Asia Pacific (Japan, China, India, Australia, Southeast Asia, and Rest of Asia Pacific)

  • Rest of the World (Latin America, Middle East & Africa)



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 642.4 million in 2019 and is projected to reach USD 7,388.2 million by 2027.

In 2019, the market value in North America stood at USD 237.7 million.

Growing at a CAGR of 41.8%, the market will exhibit stellar growth in the forecast period (2020-2027).

The rotary-wing segment is expected to be the leading segment in this market during the forecast period.

Increasing demand for quick & efficient delivery of food parcels and the emergence of new package delivery service companies are the major factors driving the growth of the market.

North America dominated the market share in 2019.

Growing e-commerce platforms and online food & meal trends are expected to drive the adoption of drone package delivery products.

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