Glovo to exit Ghanaian market amid profitability challenges
TLDR
- Glovo to cease operations in Ghana on May 10, 2024, due to profitability issues despite investing $3.7 million.
- Glovo plans to redirect resources to other African markets like Morocco, Uganda, Kenya, Côte d'Ivoire, and Nigeria.
- Decision made to focus on achieving profitability and better serving customers in selected markets.
Glovo, a food delivery platform, will cease operations in Ghana on May 10, 2024, citing profitability issues in the Ghanaian market, despite investing $3.7 million to expand its operations in the country over the past two years.
In an email sent to its restaurant partners, Glovo explained that while it recognizes the potential of the Ghanaian market, building a stronger position and achieving profitability would require substantial investment over an extended period.
As a result, the company has chosen to redirect its resources towards other African markets where it operates. Glovo will now focus its efforts on markets such as Morocco, Uganda, Kenya, Côte d'Ivoire, and Nigeria, where it aims to better serve its millions of customers.
Key Takeaways
The challenges facing the food delivery ecosystem in Ghana, including high taxes, low wages, and high inflation, have contributed to a complex operating environment for companies in the sector. Despite these challenges, the online food delivery market in Ghana is expected to show strong growth, with revenue projected to reach $224.60 million in 2024 and a forecasted market volume of $544.30 million by 2029, representing a 19.37% annual growth rate. The exit of Jumia from the Ghanaian market in December 2023 reflects the difficulties faced by companies in navigating the operational and regulatory landscape. However, other players like Bolt Food have chosen to remain active in Ghana despite discontinuing operations in other African countries like Nigeria and South Africa.
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