Glovo, a food delivery platform, will cease operations on May 10, 2024, in Ghana, two years after investing €3.5 million ($3.7 million) to expand its operations.
The platform announced this via email to its restaurant partners. According to the company, it decided to cease operations due to profitability issues in the Ghanaian market.
With this development, Glovo will concentrate on other African markets such as Morocco, Uganda, Kenya, Côte d’Ivoire, and Nigeria.
“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 the Glovo app every day,” the delivery platform said via email.
Glovo also stated that as of 10 p.m. on May 10, 2024, customers’ apps will no longer be available for ordering, while restaurant partners will receive outstanding payments following the terms and conditions.
Meanwhile, in 2021, Co-founder Sacha Michaud stated, “The Ghanaian market is a promising market for Glovo, and we will continue to invest to reach all regions of the country and provide convenience to people.”
He went on to say that Ghana’s growing population and increased Internet penetration were advantageous for business.
Besides, he said that Glovo Ghana collaborated with approximately 400 partners in Accra, including pharmacies, groceries, electronics, and restaurants, and that the order growth for Glovo Ghana services ranged from 30-45% month to month.
According to reports, the food delivery ecosystem is struggling with several problems, such as high taxes, low wages, and high inflation. Ghana’s online food delivery market is expected to generate US$224.60 million in revenue in 2024, with a 19.37% annual growth rate (CAGR 2024-2029), resulting in a projected market volume of US$544.30 million by 2029.
Jumia, like some other African countries, discontinued its services in Ghana in December 2023. Meanwhile, Bolt Food has closed its operations in Nigeria and South Africa but remains active in Ghana.
Source: Techpoint Africa
