Only 6% consumers surveyed willing to pay a delivery charge for an eCommerce/food/medicine order delivered by drones

November 17, 2024, New Delhi: With some eCommerce and quick commerce delivery service providers testing drones for last mile delivery, consumers are discussing if drone deliveries for such orders makes much sense, especially on a chargeable basis. One or two companies are testing drones for delivering parcels and medicines or delivering goods within an apartment society.

A major hurdle to the drone delivery plans of logistics and ecommerce delivery providers is the current regulations of the Directorate General of Civil Aviation (DGCA), which has restricted all Remotely Piloted Aircraft (RPA) operations, regardless of weight category, to Visual Line of Sight (VLOS). This limitation requires remote pilots or observers to maintain direct, unaided visual contact with the drone, significantly constraining operational range compared to BVLOS (Beyond Visual Line of Sight), which permits drones to be controlled beyond the pilot's visual range.

The government had been utilizing drones in a limited way for inspection of oil pipelines and power transmission lines, anti-locust operations, agricultural spraying, survey of mines, and land mapping from the past couple of years. In 2022, the government allowed the private players to freely use drones for delivery purposes subject to compliance with Drone Rules 2021.

The global drone industry value is expected to be USD 54 billion by 2025. The Indian drone market is projected to grow from USD 654 Million in 2024 to USD 1,437 Million by 2029, growing at a CAGR of 17.0% during the forecast period. The drone volume in the country is projected to grow from 10,803 Units in 2024 to 61,393 Units by 2029, according to marketsandmarkets.com. Several government initiatives and schemes like SWAMITVA and Drone Shakti are helping create a support system​​ of trained pilots, engineers and technicians needed for the drone industry to grow.

Drone services are becoming more widely recognized in many industries as a more practical alternative to drone ownership. For instance, in the agricultural sector with most farmers not able to afford drones, a pay-per-use business model is emerging as an option. However, for companies which use drones on a regular basis, purchase of drones is a more viable solution.

Currently drones do a variety of jobs in India. Some police forces are using them for monitoring the traffic and border security forces use them to search for smugglers and traffickers, etc. Their usage has also started in the farming sector, where they are being piloted to monitor the health of crops and spray them with fertilizer and pesticides, to produce accurate volumetric measurements and yield estimation. In addition, drones are being used for GIS Surveying, drone inspection, mining services, flood Assessment, topographic survey, UAV data processing, 3D mapping, and aerial photography, transportation, renewable energy, mining, utilities, infrastructure, etc.

As companies wait for the government nod to drones being used for commercial cargo and parcel deliveries, LocalCircles through a survey attempted to understand consumer expectations and whether they would like to avail of faster drone delivery services. If so, at what extra cost? The survey received over 22,000 responses from consumers located in 298 districts of India. 63% respondents were men while 37% respondents were women. 44% respondents were from tier 1, 32% from tier 2 and 24% respondents were from tier 3, 4 and rural districts.

Indians surveyed see major application of drones in border surveillance, monitoring of disaster sites/ relief work and delivery of replacement organs to save lives

The survey first sought views of the public on usage of drones. It asked, “In what areas do you see India deploying lots of drones in the next five years?” Some among the 11,419 respondents chose more than one option. The largest group of 91% respondents indicated “surveillance of India’s borders”; 79% indicated “monitoring of disaster sites for relief and evacuation”; 53% pointed to “delivery of replacement organs and life-saving drugs”; 47% indicated “surveillance of cities”; 30% indicated “surveillance of farms”; 23% indicated “delivery of ecommerce shipments, medicine, food, etc. and 12% indicated other areas. However, 7% of the respondents are pessimistic as they “don’t see lots of drones being used in the next 5 years” while 2% gave no clear response. In sum, over the next 5 years, Indians surveyed see major application of drones in border surveillance, monitoring of disaster sites/ relief work and faster delivery of replacement organs to save lives.

Only 6% of those surveyed have indicated willingness to pay for drone delivered eCommerce/ food/ medicine orders.

Since eCommerce/quick commerce platforms and more so their delivery service providers have been reported to test drone-based delivery services, the survey next asked consumers, “What would you be willing to pay for a drone-based delivery of your ecommerce/ food/ medicine order?” Out of 11,187 respondents to this query 87% stated “none, wouldn’t want to pay anything extra” while 3% indicated INR 25-500 and another 3% INR 500-1000. In addition, the remaining 7% of respondents gave no clear response, opting for “can’t say”. In sum, only 6% of those surveyed have indicated willingness to pay for drone eCommerce/ food/ medicine orders. This finding indicates that if the cost of drone delivery is not imposed on the consumers, they would be willing to use the services but only a small 6% are willing to pay extra for drone-based delivery.

In summary, 87% of respondents, though they see good potential in drone services, are not willing to pay anything extra for faster delivery of eCommerce, quick commerce orders or parcels through drones. While respondents to this survey see endless possibilities of using drones with 91% indicating “surveillance of India’s borders”; 79% indicating “monitoring of disaster sites for relief and evacuation”; 53% pointing to “delivery of replacement organs and life-saving drugs”; 47% indicating “surveillance of cities”; 30% indicating “surveillance of farms”, only 23% see potential for “delivery of eCommerce shipments, medicine, food, etc. With only 6% willing to pay for drone-based delivery services, it may be time for eCommerce and quick commerce platforms to revisit the drone delivery services and see how it can be made so efficient logistically that the consumer is not impacted with an additional delivery charge. Otherwise, the service will just be an exception/need based service that only those in emergency need may use.

Survey Demographics

The survey received over 22,000 responses from citizens located in 298 districts of India. 63% respondents were men while 37% respondents were women. 44% respondents were from tier 1, 32% from tier 2 and 24% respondents were from tier 3, 4 and rural districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.