[Report] Does delivering milk tea and chicken nuggets by drone make sense?
An evaluation of Meituan's meal delivery drone logistics business
Contents
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Introduction
One of the cities we visited on last month’s ChinaTechTrip study tour was Shenzhen. Shenzhen is probably the most futuristic city in China, with driverless cars cruising the streets and drones buzzing between the high buildings. The drones attract a lot of attention from tourists visiting the city, and it’s not hard to find videos of drones delivering milk tea on social media.
As such, a visit to the drone dispatch and delivery stations just had to be part of the program. But unlike other ‘tech tours’ that have participants gawking at all this new technology, I wanted to take a step further and give our group an assessment of the possibilities and limitations of meal delivery by drone and answer the question, ‘Does this actually make sense for consumers and the meal delivery companies?’
The desire to answer this question and provide the group with valuable insights resulted in the report below, which is partially based on six expert interviews conducted by the Six Degrees Intelligence network. After an examination of the drone logistics industry in general (available to read for all subscribers), the report zooms in on the progress and challenges of Meituan’s drone initiatives. That section of the report is only accessible to paid subscribers.
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Ed Sander, China Retail Tech Analyst
Drone Logistics: Market Landscape and Policy
China’s low-altitude economy began around 2016, fueled by advancements in drone technology and the opening of airspace below 1,000 meters (up to 3,000 meters in some regions). It integrates various types of aerial vehicles (drones, eVTOLs, and helicopters) with diverse industries, including logistics, tourism, and urban mobility. According to official data from various countries, China’s rapid expansion of low-altitude airports and airspace management stands in stark contrast to the more gradual progress in other countries, making China a leader in developing the low-altitude economy. [1]
A report from CCID Consulting, a think tank associated with the Ministry of Industry and Information Technology, revealed that the value of China’s low-altitude economy reached nearly RMB 506 billion (US$69.8 billion) in 2023, a 33.8% increase compared to the previous year. The report projected that its value will exceed RMB 1 trillion by 2026 and RMB 2 trillion by 2035, driven by government support, innovation, and rising demand. The Chinese government is accelerating growth through infrastructure and policy support. The low-altitude economy was also included in the Government Work Report for the first time in 2024. [2]
The application of drones in China’s logistics industry is developing rapidly. The sector has transitioned from experimental pilots to a high-growth sector, with its growth rate in 2025 expected to more than double that of the previous year. In the logistics and postal sectors, drones are already quite common in government-enterprise cooperations. For example, China Post uses drones to transport supplies during emergencies and earthquake relief. By mid-2025, drone flight time had exceeded 20 million hours, with SF Express and Meituan each exceeding 1 million flights in the logistics field.
Besides being a growth engine, drone logistics has significant environmental advantages. Studies show that drone delivery can reduce carbon emissions by up to 90%, helping alleviate urban traffic pollution and congestion. [1]
Regional Leadership
The development of the low-altitude economy in China is mainly concentrated in the Pearl River Delta, the Yangtze River Delta, and the Southwest region. The Pearl River Delta, centred on Shenzhen and Guangzhou, extends its influence to surrounding cities and enjoys strong policy support. In the Yangtze River Delta, cities like Suzhou, Hangzhou, and Shanghai are developing rapidly, but Shanghai’s development is somewhat hampered by airspace restrictions.
Notably, Nanjing, Hefei, and Wuhu are considered third-tier cities in the Yangtze River Delta, with Hefei’s economic growth particularly impressive, potentially surpassing Nanjing and Suzhou in the future. Hefei has invested heavily in the financial sector, and its level of development is now comparable to Shenzhen’s.
Local government officials are actively involved in low-altitude economy-related affairs, but different regions have different development strategies. Some regions emphasise providing application scenarios, while others focus more on manufacturing. The Southwest region, centred on Chengdu and Chongqing, sees surrounding cities focusing on manufacturing advancements.
The rapid development of the low-altitude logistics market is driven by policy support, increased social acceptance, and technological advancements. After the central government’s policy was released, local governments and pilot units quickly took action to promote drone logistics. Cities like Shenzhen and Hangzhou have already begun promoting drone logistics, while Suzhou, Nanjing, Chongqing, and Chengdu will also advance this field. However, due to airspace control, safety concerns, and the imperfect air traffic management system, manned drone technology is not yet mature. Therefore, China has adopted a “goods first, people later; small-scale first, large-scale later” strategy in developing its low-altitude economy, prioritising cargo delivery logistics.
Shenzhen
Shenzhen is at the forefront of the country in low-altitude economy legislation, having promulgated regulations on drone security management as early as March 1, 2019. By early 2023, the low-altitude economy had been officially incorporated into the Shenzhen Municipal Government’s work plan. The National Development and Reform Commission decided to invest RMB 18 billion in Shenzhen between 2023 and 2025 to build a low-altitude economy demonstration centre. Shenzhen also launched a low-altitude operations supervision platform, investing RMB 517 million in its first phase.
The city introduced the country’s first dedicated legal framework to regulate the low-altitude economy, aiming to propel the sector to new heights. These regulations, which took effect on February 1st, 2024, emphasise the growing number of low-altitude flight applications, including aerial commuting and flying taxis. Shenzhen has a complete low-altitude industrial chain that covers unmanned aerial vehicle (UAV) research and development, production, manufacturing, sales, and practical applications. [2]
By the end of 2023, Shenzhen was home to over 1,700 drone companies with a combined annual output of RMB 96 billion, according to official data. Well-known drone companies like DJI, Autel, and Alltech are based in Shenzhen, and industry leaders such as AutoFlight, German company Lilium, and Zhuoyi have expanded operations in the city. [2] Shenzhen also features well-developed facilities, including flight service stations, general airports, and control towers. [1]
To strengthen the regulatory capabilities for low-altitude aircraft, Shenzhen has invested in the construction of a low-altitude operation monitoring platform. Through this setup, which serves as the “digital brain” for the city’s low-altitude economy, Shenzhen can significantly simplify route approval and airspace allocation processes, laying a solid foundation for high-frequency flights.
In January 2024, Shenzhen initiated a blood transportation drone program, the first of its kind in the country. [2]
As of May 2026, Shenzhen had built more than 1200 take-off and landing sites, a milestone reached ahead of the city’s original 2026 plan. [3] These sites would be divided into three types:
large take-off and landing hubs (primarily serving helicopters and large drones)
medium-sized take-off and landing sites (primarily serving medium-sized drones)
small take-off and landing points (mainly for drone cargo transport).
By February 2026, the city operated 310 low-altitude logistic routes. [3]
Drone logistics use cases
Through promotion and demonstration projects, some users (such as patients, hospitals, and shopping malls) have already experienced the benefits of aerial logistics. The demand for efficient and convenient services will further drive the popularisation of drone logistics.
Drone logistics in China is mainly used in five major areas:
The urgent need for rapid delivery of medical supplies, such as test samples and blood products, with the potential to expand to organ and tissue transport in the future. This is particularly important in cities with severe traffic congestion, such as Shenzhen, Hangzhou, and Suzhou.
The need to maintain the freshness of high-value foods, such as seafood like king crab and Australian lobster. SF Express’s Fengyi route from Nan’ao Island to Nanshan is specifically designed for this purpose.
Rapid delivery services significantly reduce delivery time, including both intra-city and inter-city deliveries.
Long-distance trunk transportation (high-volume movement of goods between major hubs), such as Ele.me’s delivery service from Chengdu Shuangliu Airport to Yunnan, Guizhou, or Chongqing, covering distances of 100-200 kilometres or more.
Other applications under development include jewellery, parcel, and express delivery.
Currently, drone infrastructure mainly utilises existing space, without requiring large-scale construction of dedicated areas. Drone take-off and landing points are typically located on the rooftops of medical institutions, in open spaces in retail centres (see picture below), in core areas of public green spaces (see picture below), in commercial district centres, or in residential squares, and are equipped with automated devices such as parcel lockers or parking facilities.
A Meituan take-off station in Shenzhen. April 2026.
A Meituan landing station in Talent Park, Shenzhen. April 2026. Picture by Guligo Jia.
These take-off and landing facilities are distributed and occupy relatively small areas; some cities are piloting the construction of low-altitude flight zones. Local governments are optimistic about the potential of the drone economy, believing it will help improve economic indicators, but current practical applications still mainly rely on existing facilities.
Major Drone Logistics Operators and Strategies
Meituan, Fengyi (SF Express), and Xunyi are among the major drone logistics operators, with their regular routes primarily covering cities such as Shenzhen, Guangzhou, Suzhou, Hefei, and Hangzhou.
Meituan (Keeta Drone)
As China’s largest meal delivery and instant retail company, it’s no surprise that Meituan’s drone logistics focus on urban instant delivery. [1] Meituan launched its drone delivery initiative in 2017 to create a low-altitude delivery network within a 3-kilometre radius, improving speed, reducing costs, and meeting the demand for fast, on-demand services. [1] The drone project is personally overseen by Meituan founder Wang Xing.
Established in 2017, Keeta Drone is a Meituan team focused on exploring drone delivery services, capable of delivering over 90,000 products. By the end of June 2025, Meituan’s Drone had launched 64 routes in cities including Shenzhen, Beijing, Shanghai, Nanjing, Guangzhou, Hong Kong, and Dubai, and had completed over 600,000 orders across various scenarios, including offices, communities, and tourist attractions. [4] [5] For example, in the Great Wall scenic area, meals can be delivered in as little as 6 minutes and 37 seconds. [6]
SF Express (Fengyi) vs Meituan
SF Express’s subsidiaries, Fengyi Technology and Fengniao Technology, use drones to reduce operational costs. In 2024, their drone service in the Greater Bay Area handled 20,000 parcels daily, achieving same-city deliveries within 2 hours and cross-city deliveries within 3 hours. SF Express charges RMB 12 (~$1.68 USD) for same-city instant delivery and RMB 40 yuan (~$5.56 USD) for cross-city express delivery in Shenzhen, offering a cost-effective alternative to traditional services with faster delivery. [1]
SF Express’s success stems from heavy investments in R&D, particularly in optimising drone performance (payload, stability, and battery life), and expanding its logistics network. The company has created drone routes in remote and congested areas, cutting reliance on ground transportation, improving speed, reducing costs, and increasing market penetration. [1]
SF Express primarily uses drones to supplement its express delivery services and expand into high-value sectors, and all of its drones are independently developed.
SF Express’s Fengyi and Meituan differ significantly in their drone logistics applications. There are significant differences between SF Express and Meituan in their drone applications. SF Express has widely applied drone technology across multiple sectors, solving many practical problems. For example, in areas such as the Zhoushan Islands in Zhejiang, SF Express uses drones for cold-chain transportation of fresh food, effectively addressing the inefficiency of traditional shipping. In Ganzi, Sichuan, SF Express also uses drones to transport medical supplies such as vaccines and blood plasma. Furthermore, in remote areas like Xinjiang, Tibet, and the Yunnan-Guizhou Plateau, SF Express uses large drones to replace traditional trucks for long-haul transportation, thereby reducing costs.
Fengyi has launched an innovative service called Flash Delivery Line, which significantly improves the user experience by transporting goods directly from a central warehouse to a designated location, with couriers completing the final delivery.
In contrast, Meituan’s drone applications are primarily focused on urban food delivery. Meituan primarily uses lightweight drones for specific scenarios, with hundreds of thousands of flights annually. Meituan’s lightweight drones face fewer airspace restrictions but are more susceptible to weather conditions. SF Express, on the other hand, uses small, medium, and large drones to meet different needs, suitable for various scenarios, and treats them as a supplement and speciality service tool to its overall logistics network. SF Express’s larger drones are more resistant to severe weather and are generally unaffected unless they encounter extreme conditions, but they require separate flight route applications.
SF Express’s drones can cover a wide range of terrain, including cities, regions, plateaus, and islands, while Meituan’s drones are limited to urban areas. SF Express’s need for drone delivery is very real and urgent, such as transporting high-value seafood and medical supplies, or supplementing delivery capacity in high-altitude areas, thus solving practical problems. While Meituan’s drone delivery service does have real demand in certain situations, the overall market size may not be as large as it claims.
In terms of the number of flights in a single city like Shenzhen, Meituan significantly surpasses SF Express. However, nationwide, SF Express’s total flight count is comparable to Meituan’s. In the first half of 2025, SF Express’s drones conducted approximately 190,000 flights, delivering approximately 2.32 million packages.
Regarding business models and profitability, Meituan’s cost per delivery is approximately RMB 7-8, and it is currently in the investment phase, not yet profitable. SF Express, on the other hand, has already achieved profitability through high-value-added services and capacity expansion; for example, its seafood transportation business boasts a gross profit margin of up to 40%. This indicates that SF Express’s drone strategy has had a positive impact on its profitability at this stage.
JD Logistics
JD.com was the first to conduct drone delivery trials in China, focusing on remote areas and small-scale deliveries. SF Express started using drones in 2017 to enhance efficiency, especially in remote areas. Both companies have heavily invested in drone technology, driving innovation in China’s logistics sector. In 2024, JD.com’s drone delivery fees ranged from RMB 10 (~$1.4 USD) to several dozen yuan, depending on the region and demand, with a focus on “last-mile” delivery in rural and remote areas. Using drones to fly over mountains, lakes, etc., enabling it to cut delivery time to about one-tenth of traditional methods. [1]
In October 2025, JD Logistics announced that it will purchase 1 million unmanned vehicles and 100,000 drones over the next five years. [7]
A JD Logistics drone. Beijing, July 2024
Ele.me / Xunyi
Xunyi’s drone business primarily transports high-value medical supplies, with each delivery costing between RMB 30 and 50. Xunyi and Ele.me launched a pilot drone delivery collaboration in Hangzhou.
The partnership has settled into a clear division of labour: [8]
Xunyi (The Provider): Acts as the “Aviation Partner.” They handle drone hardware maintenance, automated landing “mailboxes” (docks), and flight safety protocols.
Ele.me (The Operator): Focuses on the “Commercial Layer.” They manage the merchants, the customer interface, and the human riders who perform the final hand-off from the drone dock to the customer.
Ele.me’s drone delivery is mainly used to transport medical supplies and supplement capacity. It was famously the first to receive a drone delivery license back in 2018 for the Shanghai Jinshan Industrial Park and has also conducted pilot drone delivery operations in several locations in Hangzhou. [8]
Ele.me is no longer trying to be “the drone for everyone.” They have ceded the individual food delivery drone race to Meituan and are instead positioning themselves as the go-to for urgent, high-value, and cross-border logistics. Instead of flying a single burger to a balcony, Xunyi drones move consolidated batches of orders from “Star Kitchens” (cloud kitchens) to high-density distribution hubs. This is where the partnership is most profitable, as it bypasses heavy city traffic. [8]
Ele.me uses drones primarily to move high-value goods, such as pharmaceuticals or electronics, from a central warehouse to a local distribution centre, where a human rider then takes over for the “last 100 meters.” They remain highly active in specialised industrial parks and suburban areas where ground traffic is inefficient, rather than the high-density urban residential routes Meituan dominates. [8]
The drones used in the Xunyi-Ele.me collaboration have a maximum takeoff weight of 25 kg and can deliver multiple orders at once. Notably, Xunyi’s drones, initially used for transporting medical supplies, have been modified into food delivery containers, demonstrating their flexibility in meeting diverse delivery needs. Food delivery utilises idle capacity, increasing Xunyi’s overall utilisation rate and helping to spread operating costs.
By mid-2026, Ele.me is expected to launch its first cross-boundary drone route between Shenzhen and Hong Kong (Tuen Mun), primarily for transporting legal and commercial documents, a move aimed at reclaiming the “innovation lead” from Meituan. [8]
Self-developed drones
Large and small-to-medium-sized enterprises (SMEs) in the logistics industry have adopted different strategies for applying drone technology. Major logistics companies such as SF Express’s Fengyi tend to utilise their own resources. Meituan has adopted a similar strategy. JD.com also released a new drone in 2024, but one year ago, its reliability still needed further verification. Several major models from Fengyi, Xunyi, and Meituan have passed operational testing.
In terms of business models, most companies adopt a heavy-asset model, while Xunyi has chosen a light-asset strategy. Xunyi does not establish its own factories; instead, it collaborates with companies such as Zhihang, Kebite, and Yixin through an ODM model to produce aircraft parts.
In contrast, Fengyi and Meituan have adopted a heavy-asset model. They are responsible not only for aircraft production but also for operations, owning their own factories and R&D teams, and establishing operating companies. While this model allows better control over the entire value chain, it also makes profitability more difficult to achieve.
Meituan has invested heavily in drone delivery development, with over 300 engineers dedicated to advancing drone technology. The company opted to build its own drones in-house to address the limitations of existing market solutions in terms of cost, efficiency, and scalability. To meet the demands of large-scale urban logistics, Meituan has focused on developing everything from drone hardware to scheduling systems, ensuring the efficiency and stability of its delivery network. [1]
Meituan’s self-developed light drones. Shenzhen, April 2026.
Companies like Ele.me and JD.com want to develop their own drones but lack the necessary expertise.
When deciding whether to develop their own drones, companies need to weigh four key factors:
1. Technological control.
There are several significant advantages for companies developing their own drones. For instance, flight data can be directly integrated into internal systems, greatly reducing the risk of information leakage.
However, developing drones also faces challenges. The difficulty varies depending on the technological field involved, with key technologies including control systems, power units, and related algorithms. Crucial components such as batteries often require reliance on specialised new energy companies. For companies with internet or related technology backgrounds, developing control systems and algorithms is manageable. This suggests they may have a greater advantage in the independent research and development process.
2. Economic efficiency.
Generally, when demand is low, purchasing off-the-shelf drones is more cost-effective. However, if demand reaches approximately 10,000 units, in-house development and large-scale production can save about 30% in costs compared to purchasing, a significant advantage.
Purchasing off-the-shelf drones is a common choice for government agencies with low flight frequency and simple needs. However, for companies that require large-scale, high-frequency use and prioritise data security, in-house development is more advantageous. This approach better meets specific application needs and provides greater flexibility and security.
3. Certification processes.
Regarding certifications, companies that develop their own drones can apply directly to the relevant departments, making the process more flexible. In contrast, purchasing off-the-shelf products requires reliance on suppliers and may not fully meet the company’s specific needs. This can be a significant advantage for in-house development in certain situations.
4. Customised requirements of the application scenarios.
Taking Meituan as an example, through independent research and development, they have successfully integrated drone take-off and landing points with delivery lockers, achieving a high level of customisation difficult to achieve through outsourcing.
The rest of this report examines the advantages and limitations of meal delivery and drone-delivered retail, specifically for Meituan. It is available only to paid subscribers.