The delivery drones market is poised to register a CAGR of over 12% during the forecast period (2022-2027).

Due to the COVID-19 pandemic, there has been an increased deployment of drones for the delivery of a wide range of medical equipment, cargo, and parcels, due to increased emphasis on contactless deliveries to remote areas at a faster pace compared to traditional delivery channels, leading to increased demand for delivery drones in 2020. A similar trend of robust investments toward realizing the drone delivery technology continued in 2021, with many operators completing their drone delivery test flights.

With the increased demand for drone delivery services globally, various countries are easing the regulations to support the operation of drones in their airspace, which is expected to accelerate the growth in procurements of drones to offer new delivery routes for remote areas during the forecast period.

As the market is currently in its infancy stage with enormous opportunities in the industry, various companies, such as Google LLC, Inc., and Deutsche Post DHL Group, have been investing in developing and deploying their fleet of delivery drones. Various companies entered the market over the years, performed their first flights, and received approvals from bodies regarding the usage of delivery drones. Such developments are anticipated to propel the growth of the market in the coming years.

The increased investments toward the development and integration of beyond visual range of sight (BVLOS) capabilities to drones will allow companies to cover far greater distances, which is anticipated to drive the growth of the market.

Delivery Drones Market Trends

Retail and Logistics Segment Held the Largest Market Share by Revenue in 2021

The retail and logistics segment currently dominates the market, and it is expected to continue its dominance during the forecast period due to the increased demand for drones to deliver parcels and packages from retailers, e-commerce providers, last-mile delivery companies, shore-to-ship drone operations, and postal companies. Major e-commerce companies and local postal authorities, in collaboration with local governments, are launching drone delivery services to minimize the efforts to deliver packages and parcels to remote islands, mountainous areas, and cities. For instance, in October 2021, Royal Mail completed the testing of autonomous UAV flights with Windracers Ltd between Kirkwall and North Ronaldsay. The trial was a part of the Sustainable Aviation Test Environment (SATE) project based at Kirkwall Airport. The flight test was the third flight trial for the company over a period of one year. Similarly, in April 2021, the Maritime and Port Authority of Singapore began a new program to use drones for the transportation of documents, supplies, and parts to vessels at anchor in its harbor as part of the country’s plan to integrate advanced drone technologies for marine applications. Due to the lack of delivery personnel and the impact of the global pandemic, the necessity to respond to changes in the logistics industry has become more urgent than ever before, and the use of drones may help realize automatic, contactless delivery services on remote islands, mountainous areas, and even within the cities. This is strengthening the demand for the segment during the forecast period.

Asia-Pacific Expected to Witness the Highest Growth During the Forecast Period

Asia-Pacific is expected to witness the highest growth during the forecast period. With the changing regulations in the countries, the increasing support for commercial drone operations is propelling the growth of drone delivery operations in the region. China is the largest market for delivery drones due to increased drone delivery operations from major e-commerce companies like and Alibaba Group. The government of China, through the State Post Bureau of the People’s Republic of China, issued a new Specification for Express Delivery Service by Unmanned Aircraft (Standard), which came into effect from January 2021. The Standard was developed by EHang,, and ZTO Express to improve the last-mile delivery service and promote the development of intelligent aerial logistics in the urban air mobility (UAM) industry. Similarly, the Indian government is working on developing drone corridors to promote cargo delivery services. With the support of such changes in the drone regulations in various countries of the region, companies have been robustly developing plans for the drone delivery services sector. In April 2021, ANA Holdings Inc. entered a partnership with Wingcopter to accelerate the deployment of drones to deliver vital pharmaceuticals and other consumer products to the country’s remote islands and mountainous regions. The company plans to commercialize drone delivery services by 2022, as Japan’s government planned to relax drone regulations by the end of 2020. Such plans of the companies to introduce drone services are expected to propel the market’s growth during the forecast period.

Delivery Drones Market Competitor Analysis

The market of delivery drones is highly fragmented, with many new players entering the market. The prominent players in the aircraft delivery drones market are DJI, United Parcel Service of America Inc., Zipline, Deutsche Post AG, Flytrex, and Inc. The advent of players from the logistics, healthcare, and food delivery sectors into the drone market led to increased competition for delivery drone manufacturers. To further increase their share in the market, the companies are investing in increasing their fleet of drones and beginning their operations with new regulatory approvals. For instance, in May 2021, Flytrex received FAA approval for drone delivery and flight over people, which allowed the company to expand retail goods drone delivery services in Fayetteville, North Carolina (United States). In December 2021, the company was approved by FAA to expand its delivery radius to one nautical mile across all of its operating stations in North Carolina (United States). The market is expected to become more competitive during the forecast period, as many companies from various sectors are eyeing the potential benefits of drone delivery and planning to use the huge opportunities in the market.

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