After two years of investing €3.5 million ($3.7 million) to expand its operations, the food delivery platform Glovo will cease operations in Ghana on May 10, 2024.
The platform notified its restaurant partners through email. The firm claims that it ceased operations in Ghana because of profitability concerns.
Part of the mail reads: “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.”
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Glovo’s effort in Ghana
In the fourth quarter of 2021, Glovo co-founder Sacha Michaud announced the company’s intention to invest 3.5 million euros in Ghana. He claims that the decision to increase investment was based on the company’s perception of Ghana as a promising market for digital delivery.
The government’s belief in digitalisation is encouraging, particularly for the SME sector. They thus became an intermediary in this field and were prepared to inject additional resources into the Ghanaian operations. “We are looking at about 3.5 million euros in investments for 2022, and we plan to double our investment in Ghana,” he added.
According to Michaud, Glovo’s rapid grocery service has been its fastest-growing business, and the company plans to build on its success in Ghana by expanding into other markets. Since beginning operations in Ghana in March of this year, he claims that the order growth for Glovo Ghana services has varied between 30-45% every month.
He predicted that in 2022, the value of the orders would increase between one and 1.5 million euros, and they are currently standing at half a million euros month-on-month. In Accra, Glovo Ghana had around 400 partners, which included medical clinics, supermarkets, electronics stores, and restaurants.
This on-demand platform supposedly fulfilled over 255 million orders, making it the biggest one originating from mainland Europe. In 80% of the countries where it operates, Glovo holds the top spot in the market. Early on, the business revealed that it would invest as much as €25 million ($30 million) to grow its meal delivery business.
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What next for Glovo
The email delivery platform expresses its decision to refocus on the other 23 countries where Glovo operates to better assist the millions of users who use the app daily.
Glovo announced that customers’ apps would be inaccessible for placing orders as of May 10, 2024, at 10:00 p.m. By the terms and conditions, partner restaurants can receive pending payments.
As a result of this change, Glovo will shift its attention to other African markets, including those in Nigeria, Ivory Coast, Kenya, and Uganda.