After two years of operation, Bolt Food has decided to exit the Nigerian market on December 7, 2023, according to a media report. The company announced its decision to withdraw from the Nigerian market, citing its little success in capturing a small portion of the thriving market. This fell short of its expectations following significant investments in the market. Femi Adeyemo, Bolt’s communications manager in Nigeria, who disclosed this, said that the company arrived at this decision after conducting a comprehensive assessment of its operational performance in Nigeria.
He explained that, in keeping with Bolt’s commitment to frugality and efficiency, the company has decided to cease operations in Nigeria, thereby ending the Bolt Food brand there. The company has made huge investments over the past three years to expand its presence in these markets by offering cheap commissions to boost product variety and incentives to lure customers to Bolt Food. He lamented that unfortunately, these investments had yielded less than a five percent share of the Nigerian market.
Economic crisis in Nigeria worsened the situation.
In 2022, the Nigeria online food delivery market was valued at $834.7 million. The market is projected to expand at a CAGR of 12.2% from 2023-2028, rising to a total value of $1.719.4 billion by the end of that period. This probably marked the way for Bolt Food’s October 2021 entry into the Nigerian e-commerce industry. This followed the COVID-19 pandemic, which opened the way for the rise of contactless processes. The firm reasoned that it was a good moment to enter the market by offering food delivery services, as consumers were understandably hesitant to leave the safety of their homes in search food.
However, it was up against some other competitors in the market, like Jumia Foods, Gokada, and O-Foods. Although the competition was manageable at the time, new entrants such as Glovo, Kwik, and Chowdeck made it much more challenging. These new entrants competed with their forerunners by offering more features, varieties, and innovations than them. It was further worsened by the country’s economic crisis. The country’s inflation rate has reached record highs due to the government’s policies, which have also limited people’s purchasing power.
E-hailing services will continue to function normally.
As consumers’ ability to spend diminished, demand for food also reduced, leaving delivery services scrambling for fewer customers. Many companies in Nigeria are feeling the effects of the country’s weakening economy, including Bolt e-hailing, Bolt Food, and other services. As a result, it appears that the firm is abandoning its food business in Nigeria in favour of putting all of its resources into its core service, e-hailing, which is also apparently suffering its fair share of challenges.
This move is seen as consistent with its long-term goal to operate profitable business lines and direct resources to where they will have the greatest impact and provide the finest services to their customers and partners. It claims that the current focus, E-hailing services, will continue to function normally, and that it has no plans to scale back its operational activities. The food delivery market in Nigeria appears to be booming this year. This is because, especially among the younger generation, there has been an increase in the demand for fast food and eating at eateries.
The exit is limited to Nigeria and will not expand.
Nonetheless, the food delivery industry has a number of obstacles, such as the need to manage customers’ expectations, inappropriate food handling, price fluctuations in the market, and challenges with logistics. However, the industry is set for future expansion, and that growth will usher in investments in addressing the problems. When asked if there’s a chance that the service could come back in the future, the company responded that it’s focus is only on its e-hailing services and also noted that this exit is limited to Nigeria issue and will not expand to other markets in Africa.