The concept of drone delivery is barely in its infancy, yet the global long-range drone package delivery market is experiencing a significant growth due to demand for faster delivery system. Long-range aerial delivery drones can travel over 25 kilometers in a single charge, making possible an instantaneous delivery.
Source: Cargo Drones: The Future of Parcel Delivery, Roland Berger.
The drone market will grow to $42.8 billion by 2025. From generating $22.5 billion in 2020, it will grow at CAGR of 13.8% to almost double that in 2025. This fairly stable year-on-year growth reflects the ongoing high investments and the consolidation of the commercial drone market. By 2021, the commercial drone industry will be selling 1,000,000 units per year. Looking at the growth between 2020 and 2025, unit sales will have more than doubled in this time period.
Source: Global Drone Market Report 2020-2025, Drone Industry Insights
Currently, the domestic drone markets in USA and China are dominating the commercial drone market. Together, they revenue makes up over two thirds of the global drone market size and this is unlikely to change in the foreseeable future. North America generated more revenue than Asia did in 2018, but Asia already pulled ahead already by the end of 2019 and will continue to build on this growth as the leading regional market in 2025.
Source: Mordor Intelligence
According to ARK Investment Management, affordable parcel delivery by drone will be going to change consumer shopping behavior. Based upon ARK’s assumption given regulatory approval in the US, parcel drones could deliver packages profitably for only $0.25. Pending regulatory approval, revenue from parcel drone delivery could total $113 billion by 2030.
Source: Parcel Drone Delivery Should Supercharge Ecommerce, ARK Investment Management
In the US, drone delivery has been impeded by onerous federal regulation, therefore Amazon and Google in response are testing their drone delivery operations in more regulatory friendly locations. Among those are the UK, Canada, the Netherlands, and Australia. Recently, Chinese authorities have been very friendly to drone delivery as, for years, the testing has been initiated in more than 100 villages in rural China.
Source: Perspectives and Suggestions of UAV in Logistics, FonAir Aviation
In March 2018, China-based logistics giant SF Express has become the first company to be issued with a commercial license for last mile delivery by the Civil Aviation Administration of China (CAAC). The goal is to achieve a 36-hour nationwide delivery network in China by 2022. Domestic competitor like JD.com soon received similar license and has completed government-approved deliveries of more than 250 kilometers between islands in Indonesia, overcoming previously insurmountable boundaries and distances.
Source: SF Express Approved to Fly Drones to Deliver Goods, Caixin Insight
TAKE-HOME MESSAGE
The next generation of drones is the 7th, and it has already been underway. With built-in safeguards and compliance technology, smart accurate sensors, and self-monitoring, drones have entered the next UAV revolution. The commercial drone industry is still young, and the market leaders are still a handful of early-stage manufacturers. However, new developments and applications have already come along as significant investments are pouring into this promising industry every day.
Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor