Are UAE's leading supermarket operators getting ready for drone delivery?

Dubai: The hypermarket operator Lulu could launch grocery and other deliveries in Dubai, as leading retailers and quick service delivery companies give serious thought to how to operate such new services profitably.

According to informed sources, Lulu has started feasibility studies. But any decision to actually launch commercial drone-based delivery will need to get the Ministry of Civil Aviation’s approval.

At least one other leading supermarket chain in the UAE is also thinking along the same lines. Gulf News spoke to some of the other possible contenders in the quick delivery by drone service, including the biggest ecommerce players. But no confirmation on any such plans were received.

If Lulu or some of the other major-league names in the UAE retail sector take to drone-based deliveries, it opens up more possibilities how services can be delivered to customers. And how quickly this can reach them.

It was December last year that China’s Keeta Drone confirmed it has become the first recipient of UAE’s Beyond Visual Line of Sight (BVLOS) license, which allows drone deliveries.

These deliveries are only meant for within Dubai Silicon Oasis. The company’s drones have a coverage radius of 2.9 kilometres.

“The delivery fee for each order is Dh9.5 - with no additional charges compared to traditional delivery methods in DSO,” said a Keeta Drone spokesperson. “The minimum spend per order is set by merchant (partners) and remains consistent with (those for) traditional delivery. We do not disclose future pricing plans at this time.

“In collaboration with the Dubai government, we are exploring possibilities to expand our service coverage. We expect consumers and brand partners in more areas to soon experience our services.”

In the UAE, Q-commerce (quick-commerce) services have established themselves as a major component of the wider e-commerce space. These provide delivery for customers within a 15- to 30- minute window, with all the major ecommerce marketplaces and delivery companies competing in this.

Drones will thus add another layer to how fast deliveries can happen, of course, within well-defined areas of operations. And chances are that there will be many UAE consumers who will like the sheer novelty of having their orders delivered by drones – and not mind paying a certain extra for it.

But for the operators themselves, such services need to be seen as likely to be profitable before they commit investments.

“The last-mile delivery costs are significant while consumers want convenience,” said Sandeep Ganediwalla, regional Partner at the Redseer consultancy.

“So, drones offer a good soltuon to delivery at high speeds irrespective of the road traffic. And as their scale increases with higher use, costs will go down. So there is excitement.

“However, the industry is very nascent and regulations are still being developed.”

Drone options are not just for grocery delivery. In Abu Dhabi, the aviation-tech firm LODD partnered 7X launched the first pilot flight for autonomous drone parcel deliveries in the emirate. This was done through their logistics and express delivery arm EMX and with the active support of ADIO (Abu Dhabi Investment Office).

The first test flight, in Khalifa City, had a drone transport a simulated package from a local post office to a designated drop zone using a secure winch-based delivery system.

“Abu Dhabi’s recent autonomous drone delivery marks a major step in enabling advanced aerial systems to serve communities at scale," said Omran Malek, Head of SAVI Cluster, Abu Dhabi Investment Office.

"Within our SAVI cluster, we are developing the infrastructure, regulation and partnerships needed to move from experimentation to real-world integration."

Outcomes from these efforts are going to show up the UAE's air and even at doorsteps as drones do the hard miles.