According to the Ghana Food Index released in 2020, the Ghanaian food and grocery retail market were valued at USD 311.7 million in 2018 and it is expected to grow at a CAGR of 14.6% to reach over USD 500 million by 2026.
The increasing disposable income of the people in Ghana will increase the buying power of people for consumer goods. According to the World Bank, in 2017, the household final consumption expenditure grew by 11.3% in Ghana.
With recent economic hardships and global pandemics, it has become increasingly imperative that we all take the food industry seriously. Fortunately, it has boomed over the past few years in Ghana and this can be greatly attributed to e-commerce growth.
Ghanaians spend most of their income on food and non-alcoholic beverages which account for 41% of total expenditure.
Ghana is also the 11th largest grocery retail market in Africa, and the second largest in West Africa only after Nigeria. Hence, online food delivery is gaining momentum through companies such as Jumia. Below, we examine this recent but highly beneficial trend.
E-commerce in Africa is still in its infancy by global standards standing at less than 2% vs 20% in China or 12% in the USA. Despite this, e-commerce remains promising with rising GDP contribution indicating a consumption-driven region and job creation.
New innovations in the food industry, one of the world’s oldest and largest industries, are creating attractive opportunities for women and youth on the African continent. More than 5 million jobs can be created in 2025 in Africa by Online Marketplace.
E-commerce companies through the internet have provided affordability and convenience while also ensuring that local businesses are developed. The online food business has seen a great spike in recent years as more and more people embrace technology and e-commerce.
The increase in the number of internet and smartphone users has played a key role in this regard. Today, many people enjoy their favourite meals from the comfort of their homes and offices by just ordering online and getting the meals delivered.
These e-commerce brands are also empowering many small scale food vendors to reach more customers online. The growth potential is exponential and brings forth widespread opportunities for the youth and future generations.
Innovations and technologies introduced over the past few years have also made it easier for restaurants and food vendors to manage their orders and maximize profits. Mobile applications, websites, order tracking devices, quality packaging, easy payment platforms and a timeless customer feedback service are among the many technological advancements in this industry.
With the covid-19 pandemic being widespread in 2020, providing consumers with many quality affordable options to choose from while staying safe at home and supporting restaurants to grow remain some of the greatest achievements thus far.
Taking an e-commerce company like Jumia into perspective, it can be said that the online food business in Ghana has seen very dynamic trends over the past few years. About 56% of the total orders come from men while people between the ages of 25-34 years use Jumia Food the most.
This can be attributed to their strong knowledge of technology and their adaptation to new and improved innovations. The majority of meal orders are for lunch while Fridays appear to be the days when there are most orders on Jumia. All in all, there appears to be great potential for the online food market as advancements in technology and internet penetration increase. When covid-19 peaked and lockdowns were enforced, everyone sort of embraced the concept of food delivery as it helped them to stay home and stay safe while still enjoying their preferred meals.
The delivery agents who are at the forefront of the delivery process have a big role to play in the success or otherwise of this market. Training and logistics are key when it comes to supporting them to do their jobs.
Nearly one out of every 5 people who own smartphones order food online. This gives an indication that the future is bright for the food industry in Ghana and e-commerce will continue to play its part.
The next few years will be very challenging also and that will shape the future of the online food delivery market in Ghana. How successful it becomes will hinge on the roles played by all stakeholders.