Business

Glovo shuts down operations over profitability challenges

Glovo, a food delivery platform in Africa, has announced a shutdown of its operations in Ghana as of May 10, 2024, citing profitability challenges and the need to reassess the company’s investment priorities.

“Following a reassessment of the company’s investment priorities, Glovo has decided to cease operations in Ghana by May 10, 2024,” Glovo Africa’s Regional General Manager; Mr Dima Rasnovsky, said in a statement said to one of its clients via email.

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“Glovo will focus on growing and strengthening its position in other African countries. We thank our teams, partners and riders in the country for the dedication to growing Glovo in Ghana over the last years,” he added.

The decision comes just two years after the company’s investment of €3.5 million ($3.7 million) to expand its services in the region.

“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.”

“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,” it (statement) added.

Glovo said it is dedicated to providing the local team with severance pay that exceeds the legislative minimum.

Additionally, all couriers, partners, and customers will receive comprehensive communication from Glovo regarding the closure to ensure they are informed about the situation.
Glovo’s operations

Glovo operates in 23 countries across Europe, Central Asia and with Africa being a key region for the company. It has a strong presence in countries such as Ivory Coast, Kenya, Morocco, Nigeria, Tunisia and Uganda.

The company noted that it remains committed to its operations in the remaining countries where it currently operates and believes that this decision will strengthen the platform’s position in the other markets.

Like Glovo, Jumia Foods, another major player in the African food delivery market ceased business in seven African countries last year.

Similarly Bolt Food, recently announced its exit from Nigeria and South Africa in December 2023 to streamline its resources and maximise its overall efficiency.

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