Glovo, a well-known food delivery platform, has made the decision to cease its operations in Ghana effective May 10, 2024. This move marks a significant withdrawal from the Ghanaian market, following the company’s investment of €3.5 million ($3.7 million) over the past two years to expand its services.
The decision was communicated to Glovo’s network of restaurant partners via email, citing profitability challenges encountered within the Ghanaian market as the primary reason. As a result, Glovo plans to redirect its focus towards strengthening its presence in other African markets, including Morocco, Uganda, Kenya, Côte d’Ivoire, and Nigeria.
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In an email statement, Glovo stated, “While we recognise the potential of the Ghana market, building a stronger position in the market and achieving profitability would require substantial investment over an extended period of time. This is why we have decided to redirect our resources towards the other 23 countries where Glovo operates, enabling us to better serve the millions of customers who use Glovo app every day.”
The announcement clarified that as of 10 p.m. on May 10, 2024, the Glovo app will no longer accept orders in Ghana. Additionally, any outstanding payments owed to restaurant partners will be settled according to the terms and conditions agreed upon.
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Glovo’s Co-founder, Sacha Michaud, expressed optimism about the company’s prospects in Ghana in 2021, highlighting ongoing investments to extend services across all regions of the country and provide convenience to users. Despite collaborating with approximately 400 partners in Accra, including pharmacies, groceries, electronics, and restaurants, Glovo Ghana faced challenges amidst the promising market conditions mentioned by Michaud. The order growth for Glovo Ghana services fluctuated between 30-45 percent on a monthly basis.
Industry reports project that Ghana’s online food delivery sector will generate revenue of US$224.60 million in 2024, with an anticipated annual growth rate of 19.37% (CAGR 2024-2029), potentially reaching a market volume of US$544.30 million by 2029.
The decision to exit the Ghanaian market aligns with similar actions taken by other industry players; Jumia halted its services in Ghana in December 2023, while Bolt Food has exited operations in Nigeria and South Africa but remains active in Ghana.
The decision reflects the challenges and dynamics within the online food delivery sector, as companies assess market viability and allocate resources to ensure sustainable operations and growth in the evolving business landscape.