Glovo has announced that its Ghanaian customers will not be able to place orders on its app after May 10 this year, as the company will cease operations to focus on other profitable African markets.
- •Although the company acknowledged the potential inherent in the Ghanaian market, investment has not proven profitable due to high inflation and increased taxation.
- •Glovo had invested US$ 3.7 million in 2022 to expand its operations in all Ghanaian regions, hoping to serve the country’s growing population and improved internet penetration.
- •The food delivery platform sent an email to one of its restaurant partners, promising to settle any outstanding payments before the exit.
“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,” the statement said.
Glovo has a strong market presence in Kenya, Morocco, Uganda, Cote D’Ivoire, and Nigeria. Over the years, the delivery platform has broadened its utility potential by allowing customers to not only order food but also groceries, pharmaceutical and sanitary products, and gifts.
Their month-on-month growth in Ghana averaged 30 – 45%, trailing behind other countries where the app dominates market share.
Glovo’s decision will have a serious impact on Ghana’s retail and restaurant industry whose growth has been influenced by the availability of delivery platforms carrying out services they could not offer. The platform collaborated with almost 400 retail stores dealing in different products, who are likely to face revenue crunch.
The exit follows Jumia Food which announced in December last year that it was halting food delivery operations in Ghana and other African markets.
With a growth projection of 2.8% this year, the IMF mentioned that revamping the private sector would be instrumental in the country’s recovery trajectory. These exits could cause a downturn in sectors where private businesses operate predominantly, hindering growth.
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