The future of delivery in the UAE – five trends to watch out for

Greater environmental awareness, emerging technologies, and post pandemic changes in customer behaviour mean that the traditional delivery market is set to experience a massive transformation over the next few years.

As a leading hub for emerging technologies, Dubai offers a wealth of opportunities for startups and entrepreneurs looking to enter the modern delivery space. Micromobility and sustainable Last Mile Delivery solutions also align perfectly with the principles that guide the UAE’s approach to a new phase of development over the next 50 years.

From groceries and pizza to medical supplies and parcels, here’s a look at five disruptive delivery trends, and the UAE’s role in the future of delivery.

1. Delivery drones (unmanned aerial vehicles)

E-commerce is already thriving in the UAE, with the industry predicted to generate US$8 billion in sales by 2025. However, the launch of the Dubai Programme to Enable Drone Transportation in November 2021 could take the industry to new heights.

The main objective of the programme is to explore ways in which unmanned aerial vehicles (UAVs) can be used in vital sectors such as health, security, shipping, and food. Drone delivery services would also align with Dubai’s plans to become the smartest, cleanest city in the world.

Not only would drones provide a faster, more efficient last mile delivery service, but they can also reduce congestion and carbon emissions generated by traditional transportation methods.

The programme aims to attract both local and foreign talent and investors in the drone development space and related fields. For tech startups, the opportunities are vast – think programming, virtual reality, adaptation, and consulting, to name just a few.

The drone delivery sector is set to skyrocket over the next few years. The global commercial drone market value was over US$6.5 billion in 2021 and is predicted to grow to more than US$47 billion by 2029. In the GCC alone, the drone market, valued at US$880 million in 2021, is projected to grow by a further 14% by 2027.

As the popularity of drone technology increases, forward-thinking government bodies and private companies are taking the lead. For example:

• Abu Dhabi is already adopting advanced drones to transport medical supplies within the healthcare sector.

• Amazon is preparing to introduce its first Prime Air drone deliveries in California, US, later this year.

• Dublin-based startup Manna uses drones to deliver food and groceries to residents in Ireland and is now planning to expand into mainland Europe.

• In 2019, global shipping giant DHL launched its first regular drone delivery service in urban China.

2. Self-driving delivery

Another UAE initiative set to disrupt the transport and delivery markets is the Dubai Autonomous Transportation Strategy, which aims to transform 25% of the total transportation in Dubai to be driverless by 2030.

As with drones, self-driving delivery vehicles can provide a faster, more efficient delivery service, while cutting down on transport and labour costs, carbon emissions and accidents. It is predicted that the strategy could generate AED22 billion (around US$5 billion) in annual revenues for several transportation sectors including public transport and delivery.

The first self-driving delivery vehicle, showcased in 2021 at GITEX, is set to operate in downtown Dubai later this year.

Major companies such as Amazon, Domino’s Pizza, and Walmart in the US are also in the process of developing autonomous delivery vehicles. And on the logistics side, some companies are already investing in autonomous vehicles such as automated forklifts and pallet-handling systems which can cut warehouse processing times by half.

3. Delivery robots

On a smaller scale, autonomous delivery robots are being trialled by large corporations and startups around the world in a bid to optimise Last Mile micromobility. Robots can be deployed by local shops or vehicles to navigate the final few kilometres to reach the end customer.

One of the biggest advantages of autonomous robots is that they can also travel on sidewalks and cycle lanes, helping to reduce congestion, fuel consumption and parking problems. By avoiding traffic, robots can also take a shorter path to their destination, achieving a faster delivery time.

Thanks to its top-class infrastructure and passion for emerging technologies, Dubai has been selected as the ideal location by global transportation leader FedEx to trial its first delivery robot at Dubai Silicon Oasis.

The UAE has also set up a regulatory framework which will help address the safety, security, and compliance challenges in the delivery robot space. As such, Dubai is once again demonstrating its determination to become a leading global hub for emerging, smart technologies.

4. Cloud kitchens

The restrictions of COVID-19 lockdowns and social distancing have led to a boom in the online food delivery sector, with a global market value estimated at US$150 billion.  Post-pandemic, the industry continues to grow. In the UAE, the market revenue is predicted to reach US$1.5 billion by 2027.

One of the most popular food delivery innovations to arise from the pandemic is the cloud kitchen. A cloud kitchen – also known as a ‘virtual’, ‘dark’ or even ‘ghost’ kitchen – is a commercial space specifically designed for producing food on a delivery-only basis. It allows food businesses and brands to create, prepare and deliver their products with minimal overheads and no face-to-face customer contact.

To showcase the future of food delivery, a cloud kitchen was used by Expo 2020 Dubai to offer a range of different cuisines, delivered to diners by autonomous vehicles.

What started out to reduce overheads and stay afloat during the COVID-19 pandemic is fast becoming a top food & beverage trend. In Dubai, the cloud kitchen concept is attracting both established restaurants and food-savvy startups looking for low-cost business opportunities.

5. Smart lockers

Another clever delivery concept is the smart parcel locker. A smart locker is used to store delivered online-ordered packages which can be tracked by the recipient via a cloud-based app on their smartphone.

Offering a secure and contactless delivery system, it’s no surprise that the smart locker niche has grown since the coronavirus outbreak. However, the key selling point is the convenience of 24/7 parcel collection. It’s a popular delivery solution for busy people: instead of waiting around for a courier, they can collect their goods whenever they like.

While several smart locker systems are already located across Dubai, the continuing growth of the e-commerce market will ensure further development opportunities in this smart delivery sector.

Delivery challenges bring opportunity for innovation

The COVID-19 pandemic has certainly had a major impact on the world’s delivery ecosystem. But challenging times create a conducive environment for innovation. Or as the proverb goes, necessity is the mother of invention.

With major international players like Amazon, FedEx, DHL and Deliveroo constantly working to improve their delivery options, competition in the modern delivery market is set to rise even further.

The future of delivery has its challenges, particularly when it comes to warehouse automation, micromobility and Last Mile delivery solutions. However, for creative and innovative startups that can rise to the challenge, it offers a wealth of opportunities just waiting to be explored. Dubai is just the place to explore, create, and innovate.