Glovo exits Ghana tonight
Glovo, a leading delivery platform, will cease operations in Ghana tonight at 10:00 pm. The company made the unexpected announcement to stakeholders last month, citing high operational costs and revenue shortfalls as key reasons for its withdrawal.
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As of 10 p.m. on May 10, 2024, the Glovo app would cease to accept orders in Ghana. Moreover, outstanding payments owed to restaurant partners will be settled in accordance with the terms and conditions agreed upon.
This decision follows a period of consolidation for Glovo Ghana. The company merged its Osu, Spintex, and Kumasi branches with its East Legon headquarters earlier this year due to financial constraints.
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The impact of Glovo's exit extends beyond logistics. Nearly 30 direct staff members, including managers and various department workers, will lose their jobs. The hundreds of delivery riders who formed the backbone of Glovo's services will also be significantly affected.
In an email to restaurant partners, Glovo attributed its exit to difficulties achieving profitability in the Ghanaian market. The company will now shift its focus to consolidating its presence in other African markets like Morocco, Uganda, Kenya, Côte d'Ivoire, and Nigeria.
"We recognize the potential of Ghana," Glovo stated in the email. "However, building a stronger position and achieving profitability would require substantial investment over a longer period. We've chosen to redirect resources to our other 23 markets to better serve existing customers."
This news comes as a surprise, considering the optimism expressed by Glovo Co-founder Sacha Michaud in 2021. Michaud emphasized plans to expand services across Ghana and capitalize on the country's growing population and internet penetration. Despite collaborating with around 400 partners in Accra, Glovo Ghana faced challenges despite promising market conditions.
Industry reports estimate Ghana's online food delivery sector to generate US$224.6 million in 2024, with a projected annual growth rate of 19.37%. This suggests a market volume reaching US$544.30 million by 2029.
Glovo's withdrawal mirrors recent trends within the industry. Jumia halted operations in Ghana in December 2023. Similarly, Bolt Food exited Nigeria and South Africa but remains active in Ghana.
The future of Glovo's remaining staff and delivery riders is uncertain. However, one thing is clear: Glovo's departure leaves a gap in Ghana's growing online delivery market, potentially paving the way for other companies to expand their reach.