Delivery Service provider, Glovo has announced its decision to close operations in Ghana.
In an email it sent to its customers, the company disclosed that, starting from May 10, they would seize to operate in the country which means that, the many customers who rely on them would have to consider alternatives and the many shops and restaurants would lose a portion of their customer base as elll.
Glovo started operating in Ghana in March 2021 but just after 3 years, it won’t be running again over profitability issues and in the email sent to customers, they noted that they intend to direct their resources to the other countries they operate in.
Portions of the statement sent to customers read:
“We would like to inform you that Glove has made the difficult decision to close our Ghana operations. This means that as of May 10th, 10:00pm, our customer app will no longer be available for placing orders.
“While we recognise the potential 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 Glove operates, enabling us to better serve the millions of users that use the app everyday.”
According to a report by Business Insider in 2021, the company invested $30 million in 6 African countries to help bring its delivery service to those countries but if Ghana is the only country they are shutting down in, it’s obvious that the many taxes and bad structures is making things very difficult for the company.
Sacha Michaud, the co-founder of Glovo also in 2021 mentioned that they were going to invest another 3.5 million euros in the country so it’s all too surprising that they are leaving considering that she described Ghana as a very exciting market.
“Ghana is a very exciting market not only for Glovo, but other retail business operations moving faster in terms of business growth and also like I said, the government believes in digitalisation especially for the SME sector. So, we found ourselves as a facilitator in this area and ready to inject some more into the Ghana operations”, Sacha Michaud.
“We plan to double our investment in Ghana, and for 2022, we are looking at about 3.5 million euros investments”, Sacha Michaud disclosed.
The Negative Impact On Glovo Leading Ghana.
Glove has created thousands of employment opportunities for the youth and also increased the revenue of the many businesses that are listed on the app. With a motorbike or even a bicycle, anyone could sign up as a delivery person with the company to deliver foods and other items to the homes of customers who place their orders on the app.
With Glove shutting down what this means is that all these riders are likely to become unemployed, especially for those who heavily relied on that job to earn a living.
The many restaurants that rely on Glovo to reach new customers and make extra money will now see a decline in their revenue. Customers who relied on the app to find new restaurants and place orders for their foods or items would also be left stranded.