That’s “good morning” in Yoruba
Leo Messi is arguably Barcelona’s finest export.
After more than two decades with FC Barcelona, the legendary football star moved to Paris St. Germain and was welcomed in the French capital with open arms.
In the tech space, a different kind of Barcelona export is continuing to make moves internationally. Glovo, the on-demand delivery giant, recently touched down in Lagos. It’s part of the company’s plans to be in 30 countries within a year, including 6 countries in Africa.
Although, how well Glovo’s entry is being received on the ground depends on who you ask.
Red carpet from consumers
If there’s one thing Glovo will do, it’s to give consumers more options than ever before.
If you’re in Lagos and you want to order in, you have two options:
Restaurant-to-consumer: Restaurants that have in-house delivery companies or relationships with dispatch riders. These companies are often small and the food delivery process they operate may not be app-enabled, meaning that you might have to complete your order over the phone or on WhatsApp.
Platform-to-consumer: Platforms that act as a marketplace, bringing consumers, dispatch riders and restaurants together. The lower end of this market is fragmented, with hundreds of small-scale, local platforms that, oftentimes, are also not app-enabled. On the opposite end of the market, you have larger, multi-city platforms that are app-enabled by default.
The biggest players in Nigeria’s platform delivery space, so far, have been subsidiaries of larger platforms. These parent platforms provide their food delivery divisions with a foundation to build on. For instance, Jumia Foods leverages the consumer relationships and logistics infrastructure of its parent company, Jumia, while GFoods does the same with GoKada.
Even Bolt Food, whose arrival is imminent
, has a widely popular ride-hailing platform to ease it in.
Glovo, in contrast, is introducing its platform afresh and would have to build a local marketplace from scratch.
#1 or nothing
Although, you get the sense that that won’t faze Glovo. The company has a reputation for focusing on countries where it thinks it has the chance to become the market leader, sometimes from 0% market share.
According to Sacha Michaud, Glovo’s vice-president of public affairs:
“Glovo is the market leader in 80% of the countries in which it operates.”
So, to paraphrase a popular Nigerian saying, the company clearly isn’t coming to Lagos for its dispatch riders to count bridges.
That said, if Glovo is to become the market leader in Nigeria, it would have to wrestle with Jumia Foods.
Jumia Foods is the market leader. And even though profit has remained elusive, it keeps on growing. Last year, the company claims
that order volume grew at 30% month-on-month. That growth was fueled by nationwide stay-at-home orders that were first introduced in March 2020 to control the spread of Covid-19. This led to a change in consumer behavior and a rise in at-home food deliveries.
But with the country opened back up, on-demand food apps will be hoping that the changes aren’t temporary. Or else, a market that’s already notorious for low margins will surely be too small for all the food delivery apps to compete. If this happens, don’t be surprised if Glovo beats a hasty retreat, as the company did in Latin America
As for the consumers, they’ll just be happy that there are now more service providers to choose from whenever they want to order in.