Glovo to cease operations in Ghana, two years after investing $3.7 million
Glovo, a notable food delivery platform, will cease operations in Ghana effective, May 10, 2024, two years after investing €3.5 million ($3.7 million) to expand its operations.
This announcement was contained in a precise message sent via email to all its restaurant partners in Ghana.
The company attributed its abrupt halt of operations in Ghana to profitability issues.
With this latest development, the company has revealed that it will concentrate on other African markets such as Morocco, Uganda, Kenya, Côte d’Ivoire, and Nigeria.
“While we recognize the potential of the Ghana market, building a stronger position and achieving profitability would require substantial investment over an extended period.
“This is why we have decided to redirect our resources towards the other 23 countries where Glovo operates, enabling us to serve better the millions of customers who use Glovo app every day,” management of Glovo noted via email.
The company further 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.
In 2021, the Co-founder of Glovo, 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 struggles 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.
The Food and Beverage Association of Ghana in 2023 expressed worry over how the exorbitant taxes on goods and services affect business operations in the country.
Executive Chairman of the association, John Awuni asserted imposition of high taxes on businesses is not the best solution to Ghana’s economic crises.