Bolt Food, the food delivery arm of ride-hailing company Bolt, announced it will cease operations in Nigeria effective December 7, 2023. This exit comes two years after Bolt launched its food delivery service in Lagos in October 2021, seeking to capitalize on growing demand for deliveries during the pandemic.
When Bolt Food entered the Nigerian market, it faced competition from established players like Jumia Food and Gokada. But the company claimed it quickly expanded, partnering with over “10,000 restaurants, delivered over 1 million meals, and onboarded 23,000 agents and 12,000 merchants” since launch.
Intensifying Competition in a Rapidly Growing Market
The Nigerian online food delivery market has experienced rapid growth, projected to reach $1.7 billion by 2028 according to IMARC Group. But the competitive landscape intensified as Bolt Food launched.
“At this time, we have made the difficult decision to discontinue our food delivery operations in Nigeria due to business reasons,”
“The decision to exit this market is necessary to streamline our resources and maximise our overall efficiency as a company. This means that our users will not be able to place Bolt Food orders through our food app after the 7th of December, 2023.” the company said in a statement obtained by Techpoint Africa.
New players like Glovo, Chowdeck, and Buyfood emerged, joining Bolt Food’s battle against incumbents Jumia Food and Gokada. In fact, local startup Chowdeck recently announced it crossed “₦1 billion ($1.2 million) in monthly order value” in October, attributed to organic growth.
Macroeconomic and Operational Challenges Mount
While the market rapidly expanded, driven by Nigeria’s culture of eating out, Bolt Food faced mounting challenges.
Rising fuel prices led delivery companies like Bolt to increase fees up to 50%, directly impacting costs and operations. High inflation likewise increased expenses.
Poor road infrastructure and traffic congestion in urban hubs hampered delivery times and routing efficiency. Inaccurate digital maps also impacted Bolt Food’s deliveries and operations.
Bolt Exits Citing Need to Streamline Resources
Faced with an intensifying competitive climate and challenging macroeconomic and operational hurdles, Bolt Food announced its decision to cease operations in Nigeria after two years.
In its statement, Bolt cited the exit as “necessary to streamline resources and maximize efficiency” as it continues its other services in the country. But the environment highlighted the difficulties for food delivery businesses to find growth and success in the expanding Nigerian market.