How Ecommerce Market Leader Opened Up Food Delivery Service In Nigeria
By Adedoyin Giwa
If there’s any industry that has witnessed tremendous growth, impact and success in recent years, it is the online food delivery sector. Thriving on technology and digitalization, online food service delivery is proving to be one of the best business ideas in recent times. With mergers and acquisitions, the global online food delivery market is estimated to reach $215 billion in 2024.
In Nigeria, what makes the sector enticing is the fact that there’s a huge market awaiting investors. Food is crucial for all, especially the working class in an ever busy environment like Lagos. And any service that can make it available without stress and hassle will be in good business. With an estimated population of 200 million, the Nigerian food segment is estimated to be yielding a revenue of about $33.7 billion. According to data by National Bureau of Statistics (NBS) Lagos residents spent N830 billion eating out in 2019.
This is coupled with the increasing adoption of smartphones which allows customers access services via mobile apps. According to a report by Allied Market Research, the global food delivery mobile app market is expected to hit $16.6 billion by 2023.
The investment of the likes of Jumia in food service delivery is helping to meet the yearnings of customers. Deploying Jumia logistics and technology infrastructure, the platform has been able to drive the reach of online food delivery in Nigeria. Jumia’s impact has further opened up for more investors, with the likes of Gokada and OyaNow feeding some segments of the market. The exploits of these players are shaping the supply chain and are growing the market for new entrants.
Being the market leader, Jumia is also contributing to the growth of the industry with innovative thinking and implementation. In 2020, Jumia launched the Nigeria Food Index Report which is the first of its kind in the segment. The report captured the growing popularity of fast food in Nigeria, and the positive impact as well as prospect for the Nigerian Agricultural sector. According to Jumia, the report will be a continuum as it will be released yearly.
Boost for local restaurants
More importantly, a marketplace like Jumia is having a positive impact on restaurants by giving them access to a wider audience. The platform is also enabling restaurants to stay ahead of their competitors. This was evident during the lockdown imposed by covid-19, when restaurants partnering with Jumia Food were able to sustain their businesses through the Jumia delivery network.
“Sales dropped drastically, companies shut down, and a lot of people lost their jobs. We’re grateful that Jumia kept their operation going; it was reassuring to customers, helped give them options for food at a very uncertain and difficult time, and for vendors like us, it was a huge help to still be able to keep sales going during that period. The sales we got through Jumia helped greatly in keeping our employees paid, and our operation running,” said Pop Singer and CEO, Sooyah Bistro, Bankole Wellington.
Interestingly, the Nigerian Food Index Report also revealed that local Nigerian cuisines lead the preference on Nigerians compared to continental dishes, with 64% of orders being placed for lunch.
In a bid to further drive the growth of online food and beverage delivery in the Nigerian market, Jumia Food expanded its food delivery service to five additional states in Nigeria. The new additions regarded as tier-2 cities on the Jumia Food map, are Minna, Benin City, Kaduna, Abeokuta, Kano, and Ilorin.
In 2020, Jumia also recorded a major service improvement in its existing footprints in Lagos, Port Harcourt, Abuja and Ibadan by increasing its speed of delivery, with an average delivery time as fast as 26 minutes in Port Harcourt, 27 minutes in Lagos, 28 minutes in Ibadan, and 30 minutes in Abuja.
It is an open secret that the food industry is very relevant to the Nigerian economy. With today’s covid-19 realities, the growing popularity of fast food, the crave for convenience, safety and value for money, has opened up opportunities for the food market in Nigeria. No doubt that the contribution of Jumia, the leading ecommerce platform in Nigeria and Africa is helping to explore the food segment of the Nigerian Agricultural sector which has the potential of huge contribution to the Nigerian economy.