Drone Delivery System Market

Drone Delivery System Market Outlook (2023 to 2033)

The drone delivery system market is estimated to reach valuation of US$ 6.6 billion in 2023 and will top US$ 25.5 billion by 2033, growing with a CAGR of around 14.4% from 2023 to 2033.

In 2023, the global drone market is estimated to be valued around US$ 33.9 billion, while the drone market is projected to grow at 17.6% CAGR. Drone delivery system drone is gaining popularity owing to its quick response delivery for medicines, vaccines as well as other vital cargo, wherein drone delivery system accounted for nearly 20% share of the global drone market at the end of 2022.

Report Attributes	Details
Market Size (2022A)	US$ 5.7 billion
Estimated Market Value (2023E)	US$ 6.6 billion
Forecast Market Value (2033F)	US$ 25.5 billion
Global Market Growth Rate (2023 to 2033)	14.4% CAGR
North America Market Share (2023)	30.1%
North America Market Value (2023)	US$ 2 billion
Europe Market Share (2023)	35.4%
Europe Market Value (2023)	US$ 2.4 billion
China Market Share (2023)	11.8%
China Market Value (2023)	US$ 786.2 million
Market Share of Top 3 Countries	40.4%
Key Companies Profiled	Airbus; Amazon; Boeing; DHL; Elroy Air; Flytrex Inc; Matternet; Swoop Aero; United Parcel Service of America, Inc; Volkswagen AG; Wing Aviation LLC; Wingcopter; Wisk Aero LLC; Zing; Zipline International Inc

Sales Analysis of Drone Delivery System (2018 to 2022) Vs. Market Outlook (2023 to 2033)

Unmanned aerial systems, also known as drones, are becoming rapidly popular in modern logistics operations. These delivery drones transport groceries, medicines, food, packages, and other household items. Such operations are gaining momentum in last-mile delivery due to their accuracy, environmentally friendly operations, shorter delivery times than conventional delivery channels, and lower operating costs.

According to analyst, the operating costs of drone delivery services are 40% to 70% lower than vehicle delivery service models. Additionally, the COVID-19 pandemic has further accelerated the need for alternative safe and contactless delivery models. This has increased the global demand for drone delivery services.

The logistics and retail industry is investing in and using drone technology to implement scalable and alternative delivery models. Industry giants such as DHL, UPS, Amazon, and Walmart have already implemented drone delivery services on their platforms. This industry also gets support from specialist drone delivery providers and technology providers such as Wing, Matternet, and Zipline.

• Short Term (2023 Q1 to 2026): The rising demand for aerial logistics to boost the market for drone delivery system.
• Medium Term (2026 - 2029): Many developed and developing countries are anticipated to witness comparatively high demand for such delivery systems due to the rising trend for faster deliveries.
• Long Term (2029 - 2033): Frequent improvisation in the services provided by these drone deliveries such as location trackers, and others will provide long term opportunities for service providers

From 2018 to 2022, the global market for drone delivery system registered a CAGR of 11.1%. Fact.MR, a market research and competitive intelligence provider, reveals that the market will exhibit growth at 14.4% CAGR between 2023 and 2033.

Market share analysis of drone delivery system based on application and region is provided in the above image. Under the application segment, vaccine and drug delivery sub-segment dominates with 23.1% market share in 2023.

What’s Driving High Demand for Drone Delivery System across Regions?

“Rising Importance of Drones in the Logistics Industry to Promote Drone Delivery Services”

Logistics is an important industry that can be considered the backbone of a nation's economy. Due to the outbreak of Covid-19 in March 2020, a large amount of disruption occurred in the supply chains and networks globally. Last-mile delivery processes in supply chain operations have been impacted, and retailers are still struggling to keep up with growing customer demand for fast delivery.

As such, several logistics companies are considering drone technology to reduce operating costs, overcome traffic bottlenecks, and reduce vehicle emissions while meeting customer desires for on-demand and immediate deliveries. The drone is ideal for last-mile delivery due to its compact size, low operating costs, high speed, and reduced environmental impact. That is why e-commerce giants such as Amazon and Walmart are trying to infiltrate rural and remote areas with drone deliveries.

Additionally, drones are being used around the world to deliver medicines, vaccines, food, and groceries due to the great potential of last-mile delivery by drones. The use of drones for last-mile delivery is increasing day by day around the world.

Drone delivery startup Tech Eagle, for example, was working with Indian state governments to deliver COVID-19 vaccines, medical staples, and more. Therefore, all the above factors combine to increase the demand for drones not only in the logistics industry but also in the drone parcel delivery industry. Therefore, increasing demand for drones in last-mile delivery is a key factor that affects the market positively.

“The Increasing Use of Drones by E-Commerce Companies Drives the Market for Drone Delivery Systems”

Various factors such as rising fuel, fleet service and maintenance, and labor costs are adversely affecting the earnings of e-commerce businesses. As such, many logistics companies are partnering with e-commerce companies to invest in automated logistics solutions such as drone deliveries to compete in a highly competitive market that is expected to replace manual labor.

In March 2022, a company called EHang partnered with Aerotree Group which is a flight service company in Malaysia to develop an urban air mobility business in the country, including training and MRO. According to the deal, AEROTREE has pre-ordered 10 of EHang's VT -30 drones and 50 of the EH216 series. Hence, the increasing utilization of drones via the means e-commerce industry will lead to the growth of the drone delivery system market during the forecast period.

What Do Drone Delivery System Manufacturers Need to Watch Out for?

“Rules and Regulations Associated With Drones May Limit the Market Growth”

Drones have a wider operational range than manned aircraft, in addition to other distinguishing physical and operational characteristics. Governments and commercial entities use Unmanned Aerial Systems (UAS) and UAVs for a variety of applications, but the scope of their use depends on various laws and regulations issued by numerous governments in various countries.

Such regulations limit the scope of drone operations and hinder the growth of drone market. Such regulatory hurdles will adversely affect the growth of the drone delivery system market in the long run.

Country Wise Analysis

How the drone delivery system industry in the United States will develop in future?

In conjunction with Merck, the US-based drone logistics startup Volansi made the nation's first temperature-controlled vaccination delivery in 2020. They provided healthcare in areas of eastern North Carolina where it is difficult to receive it, such as on barrier islands and remote rural communities.

While businesses wait in line for permission, other partnerships are developing. Walmart and Zipline, a company with headquarters in San Francisco, California, are testing small-scale deliveries of over-the-counter medications from a community market in Pea Ridge, Arkansas.

In a different collaboration, Zipline is relying on FAA approval to use drones in its collaboration with US drugstore Magellan Rx Management.

Such extensive use of drones for delivery purposes garners more opportunities for service providers.

How Israel Drone Industry to Provide More Drone Delivery Systems?

The National Drone Initiative in Israel entered the other planned phases of its pilot program during 2021, kicking off a 10-day demonstration of testing drone flights in urban areas of Tel Aviv, Ramat Sharon, Jaffa, Hadera, and Herzliya.

The overall goal is to improve drone technology and procedures, and ultimately to develop aerial drones for unmanned aerial vehicles (UAVs) to deliver equipment, medicines, food supplies, health checkups, clothing, and goods. Creating a network of corridors helps reduce traffic congestion and improve air quality.

Tests are being performed to test whether drones can quickly, safely, and conveniently deliver goods to customers. Such adoption of drones in the country for delivery purposes will boost market growth.

Category wise Insights

How Vaccine and Drug Delivery Application of Drones Will Lead to Market Growth?

A major part of the world's population has bounded access to healthcare, therefore help can be provided in the form of medical drones. Also known as unmanned aerial vehicles (UAV), drones can fly long distances over hazardous terrain to deliver medicines, blood, diagnostic kits, vaccines, and other samples.

Drones can help improve national healthcare systems by connecting hospitals and laboratories with distant patients for better outcomes and reduced wait times, especially in remote areas.

Drone healthcare proofs-of-concept are constantly evolving, but early pilot studies have shown collaboration among governments, humanitarian agencies, donors, and drone system partners to reach underserved indigenous populations in remote areas around the world. It has been shown because there is expanded access to health care in tribal communities.

India's second most populous state Maharashtra, recently reached an agreement with California startup Zipline to deliver blood products, vaccines, and medicines via autonomous drones. Vaccine and drug delivery application will reach a market valuation of US$ 1.5 billion by 2023.

How Hybrid Wing Drones Will Drive Drone Delivery System Market?

The hybrid-wing sub-segment is expected to grow at a constant CAGR during the forecast period and it will achieve a valuation of US$ 1.7 billion by 2023. The growing use of fixed-wing drones for aerial videography and photography and analytics has increased demand in many countries.

The hybrid drone sub-segment is expected to drive market growth rapidly owing to VTOL capabilities and AI-based collision avoidance. This is facilitated by the hybrid UAV's superior capabilities for fast vertical take-off and landing and Al-based collision avoidance detection.

Hybrid drones are used in a variety of industrial and commercial applications due to their operational suitability. Service providers and logistics companies use multi-copter variants because they have additional payload capacity under the body. Its superior aerodynamic structure and other technical advantages are expected to drive the growth of this segment in the coming years.

Competitive Landscape

Fact.MR profiled the following top companies in drone delivery system market in its report are Airbus, Amazon, Boeing, DHL, Elroy Air, Flytrex Inc, Matternet, Swoop Aero, United Parcel Service of America, Inc., Volkswagen AG, Wing Aviation LLC, Wingcopter, Wisk Aero LLC, Zing and Zipline International Inc

The major players in the market are technology-based companies with strong product portfolios and excellent distribution networks in both developed and emerging countries. Large players such as Zipline International and UPS are expected to capture a dominant share during the forecast period.

The implementation of cost-effective services and safe and accurate transportation are major factors influencing the market. Partnerships with wholesalers, retailers, and technology-based companies are aimed at attracting new entrants to this market.

• In May 2020, Zipline International has been collaborating with the U.S. FAA based on the drone delivery concept specifically for small pilot projects. The company utilized autonomous drones to deliver about 1.8 kg pound cargo in the range of 80 Km, dropping the package with the help of a parachute for a stable and safe landing.

Fact.MR has provided detailed information about the price points of key manufacturers of drone delivery system positioned across regions, sales growth, production capacity, and speculative technological expansion, in the recently published report.

Segmentation of Drone Delivery System Industry Research

• By Drone Type :

  • Fixed Wing
  • Hybrid
  • Rotary Wing

• By Load Capacity :

  • Less than 2 kg
  • 2 - 5 kg
  • 5 - 10 kg
  • Above 10 kg

• By Application :

  • Vaccine and Drug Delivery
  • Food Delivery
  • Mail Delivery
  • Grocery Delivery
  • Consumer Electronics Delivery
  • Others

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia and Oceania
  • Middle East & Africa