AI-Enabled Last Mile Delivery Market size is projected to surpass USD 5 Billion by the end of 2035, witnessing around 20% CAGR during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of ai-enabled last mile delivery was USD 1 Billion. The growth of the market can be attributed to the increasing expansion of the e-commerce industry around the world and the need amongst business organizations for amplified service delivery which in turn would increase their brand reputation and sales. Last-mile delivery is considered to be the most important element in any service delivery process. For instance, the total e-commerce sales across the globe were anticipated to be around USD 6 trillion in 2022.
In addition to these, global AI-enabled last mile delivery market trends such as the growing need amongst businesses for enhanced service delivery processes, and the increasing need for last-mile delivery solutions amongst the end-user industries for amplified customer satisfaction experiences and revenue generation are anticipated to drive the growth of the market during the forecast period. Moreover, the latest trends observed in the last-mile delivery services coupled with the lucrative business model, which is allowing businesses to invest and adapt last-mile delivery technology are also predicted to expand the market growth over the upcoming decades. Additionally, the growing adoption of artificial intelligence technology and autonomous vehicles for last-mile delivery services and the recent trends for contactless delivery amongst the end consumers on account of the growing concern for the COVID-19 pandemic are some of the additional factors anticipated to drive the market growth in the coming years.
Growth Drivers
Growing Utilization of Aerial Delivery Drones – in modern times, people prefer online ordering the goods required for daily use such as vegetables, eggs, medicines, and others. Owing to the significant advancement in AI technology, various companies are observed to prefer AI-driven drones to make nearby deliveries. For instance, in 2022, the estimated number of drone deliveries across the globe was anticipated to be around 2000 per day while approximately 1 million drone deliveries took place in a similar year.
Rising Inclination of People Ordering Food Online – online food delivery system is noticed to boost the demand for AI-enabled last-mile delivery across the globe. Online food is delivered to the nearest areas and restaurants and other food-delivering industries can rely on AI-enabled last mile delivery services. For instance, the number of people using online food delivery services is expected to reach around 200 million by 2025 worldwide.
Increasing E-Commerce Activities – a surge in e-commerce activities has boosted the demand for AI-enabled last mile delivery to make fast deliveries. For instance, in 2022, retail e-commerce sales were projected to reach around USD 6 trillion across the globe.
Growing Penetration of Artificial Intelligence (AI) in Several Business Activities – companies and multiple organizations are now being dependent on AI technologies. For instance, globally more than 80% of the company stated that artificial intelligence was the main priority in the business strategies.
Challenges
Although AI-enabled technologies help to reduce the overall operational cost of business organizations in the long run, the initial cost of deployment of such technologies is significantly high owing to the high cost of the components associated with the deployment of the technology. Hence, such a factor is anticipated to hamper the growth of the market during the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~20% |
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Base Year Market Size (2022) |
~ USD 1 Billion |
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Forecast Year Market Size (2035) |
~ USD 5 Billion |
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Regional Scope |
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Type {Hardware (Autonomous Delivery Robots, Computing Systems)
The global AI-enabled last mile delivery market is segmented and analyzed for demand and supply by type into hardware, software, services, predictive analysis, and others. Amongst these three segments, the hardware segment is expected to garner a significant share in the year 2035. The hardware segment is further bifurcated into autonomous delivery robots, computing systems, and others. Nowadays, autonomous delivery robots are in trend and highly utilized for the fast delivery of lightweight items. These delivery robots can also be described as self-driving vehicles used for delivering goods. Autonomous delivery robots are highly used for delivering food items and medicines. For instance, nearly 30% of the global population was observed to order food online twice a week.
End-user (E-Commerce, Logistics, Healthcare, Travel & Tourism, Food & Beverage)
The global AI-enabled last mile delivery market is also segmented and analyzed for demand and supply by end-user industry e-commerce, logistics, healthcare, travel & tourism, food & beverage, and others. Out of these sub-segments, the e-commerce segment is estimated to gain the largest market share in the year 2035. The growth of the segment can be attributed to the growing e-commerce industry, backed by the shift in preferences of consumers towards online shopping from the conventional brick-and-mortar retailing business model, followed by the increasing trends of varied delivery options which helps businesses generate sales. Over the past few years, there has been an increasing development in information technology. Businesses worldwide have widely implemented information technology, such as artificial intelligence and machine learning to their existing business models for the enrichment of their existing service delivery processes. Moreover, a dynamic shift in preferences amongst customers for faster deliveries, along with the growing trends for same-day delivery, next-day delivery, and others including the ease of customized delivery slots, are some of the additional factors anticipated to drive the growth of the segment in the coming years.
Our in-depth analysis of the global market includes the following segments:
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By Type |
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By Business Model |
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By End-User Industry |
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North American Market Forecast
The North American AI-enabled last mile delivery market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2035. The growth of the market can be attributed majorly to the growing awareness amongst business organizations for such technologies, along with the presence of several key players in the region who are offering artificial intelligence solutions. On the other hand, the surge in e-commerce activities in the region owing to the higher penetration of smartphone and enhanced delivery services are anticipated to propel the market growth over the forecast period. For instance, the total e-commerce sales were estimated to be around USD 350 billion in 2022in the United States which was further anticipated to hit USD 500 billion in 2023 and is projected to reach a total value of USD 700 billion by 2025. Furthermore, the rise in the e-commerce industry in the region is also anticipated to expand the market size over the forecast period. As of 2022, around 200 million online shoppers were dwelling in the United States whole total spending on online shopping was projected to be around 5000 U.S. dollars. Furthermore, this number is estimated to reach 220 million by 2024.
APAC Market Statistics
The Asia Pacific AI-enabled last mile delivery market, amongst the market in all the other regions, is projected to hold the second largest share during the forecast period. The growth of the market can be attributed majorly to the prevalence of online shopping coupled with the boom in the regional population. Furthermore, growth in AI technology and higher adoption of robotics in delivery systems is also projected to boost the market growth in the region over the forecast period. For instance, at the beginning of COVID-19, nearly 68 million people shopped online in Southeast Asia. Additionally, the number of online shoppers is projected to reach around 400 million by 2026 in Asia.
Refraction AI planned to bring change in the mobility of delivery vehicles. Refraction AI, a start-up, made significant steps in the field of self-driving delivery vehicles which is mainly focused on local feed-delivery systems.
Jenny Labs Ltd.’ Package.ai, a customer engagement platform planned to reduce not-at-home failed deliveries by 42%. This platform focuses on furniture retailers.
Author Credits: Harshita Srivastava, Saima Khursheed
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