By Adedapo Adesanya
Glovo, a prominent food delivery platform, has announced its decision to end operations in Ghana on May 10, 2024, marking a significant withdrawal from the Ghanaian market after investing €3.5 million ($3.7 million) to expand its services over the past two years.
The company conveyed this development to its network of restaurant partners via email, attributing its decision to profitability issues encountered within the Ghanaian market.
As a result, Glovo will shift its focus towards consolidating its presence in other African markets such as Morocco, Uganda, Kenya, Côte d’Ivoire, and Nigeria.
In a statement sent via email, Glovo mentioned, “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 better serve the millions of customers who use Glovo app everyday”.
The announcement also clarified that as of 10 p.m. on May 10, 2024, the Glovo app would cease to accept orders in Ghana.
Moreover, outstanding payments owed to restaurant partners will be settled in accordance with the terms and conditions agreed upon.
In 2021, co-founder, Mr Sacha Michaud expressed optimism about Glovo’s prospects in Ghana, emphasizing ongoing investments to extend services across all regions of the country and offer convenience to its users.
He highlighted Ghana’s growing population and increased Internet penetration as favourable factors for business growth.
He noted that despite collaborating with around 400 partners in Accra, including pharmacies, groceries, electronics, and restaurants, Glovo Ghana encountered challenges amidst the promising market conditions.
The order growth for Glovo Ghana services fluctuated between 30-45 per cent on a monthly basis.
It however noted that ahead of the final shut down, all Glovo stores in Ghana will be automatically set to accept credit and cash orders in order to reconcile all affected entities, adding that Glovo’s dedicate business team will also continue to support customers and entities over the coming month for all outstanding issues to be addressed.
Industry reports suggest that Ghana’s online food delivery sector is anticipated to generate revenue of $224.60 million in 2024, with an annual growth rate of 19.4 per cent (CAGR 2024-2029), potentially reaching a market volume of $544.30 million by 2029.
Glovo’s decision 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.