Glovo Set to Shut Down in Ghana, Two Years After $3.7 Million Expansion

Glovo, an African food delivery platform, has revealed its plans to end its operation in Ghana.

This decision will take effect on May 10, 2024. The move is significant as the company invested €3.5 million ($3.7 million) in expanding to the country.

Glovo Shutdown Its Operations In Ghanaian Markets

The delivery platform communicated this new development to its partners via email and attributed its decision to the lack of profit experienced within the Ghanaian market. Consequently, Glovo has decided to focus on cultivating its presence in other African countries that align with its values. Countries such as Nigeria, Morocco, Uganda, Côte d’Ivoire, and Kenya have the necessary markets for the company’s growth.

Previously, 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 highlighted that Ghana’s growing population and increased Internet penetration were advantageous for business. Additionally, he said that Glovo Ghana has partnerships with about 400 partners in Accra. These partnerships included pharmacies, groceries, electronics, and restaurants.

He also emphasized that the order growth for Glovo Ghana services ranged from 30-45% month to month. However, the company is withdrawing its services to more profitable markets.

Glovo Highlights Reasons For The Withdrawal

The food delivery platform highlighted its reasons in the email sent to its Ghana partners. The company stressed the potential Ghana has, however, highlighted that it would require substantial investment to build a profitable business. Glovo plans on redirecting its resources to other profitable markets.

“While we recognize 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.”

Conclusion

Glovo stated its apps will no longer be available for ordering starting at 10:00 pm on May 10, 2024. The company will settle with the restaurant partners by paying all outstanding payments. This will be done in line with the terms and conditions previously agreed upon.

The food delivery ecosystem is struggling with several issues in the country. The issues include 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. The revenue has a 19.37% annual growth rate (CAGR 2024-2029), resulting in a projected market volume of US$544.30 million by 2029.

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