Online Food Market Projected to Hit $142m in 2020

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Emma Okonji

Nigeria is ahead of African countries like Kenya, Uganda, Senegal, Ghana and others in online orders for food and grocery, according to Jumia Food Index 2020 report released at the weekend.

The report stated that the value of food and grocery market in Nigeria increased over the years, and was predicted to hit $142 million by the end of 2020.

The report which was released during a webinar, attributed the growth of food and grocery to new generation of Nigerian middle class consumers that are spending more money on food and grocery products during the COVID-19 pandemic.
Analysing the report, CEO, Jumia Nigeria, Mr. Massimiliano Spalazzi, said:

“Increased internet access, smartphone penetration, COVID-19 pandemic and induced social distancing guidelines, continue to drive an uptake in online food ordering, as many people now prefer to order via their smartphone as against going out to restaurants.”

He added that the pandemic crisis did not just show the world that online food delivery could be not just a commodity, but a necessity. He said more people would rely heavily on having their hot meals and groceries delivered at their doorsteps, as against going out to offline retail shops to purchase, as governments all over the world continue to battle the pandemic.
According to the report, Nigeria’s agricultural sector, which Jumia Food supports, experienced a major boom in 2019. It was among the non-oil sector that contributed 90.23 per cent to the country’s GDP.

The global food and grocery retail market had total revenues of $44.9 billion, representing a Compound Annual Growth (CAGR) of 8.7 per cent in the last eight years. The apparent boom in the sector is creating more jobs and influencing massive food production.
The report stated that grocery retailing would continue to expand, as consumers seek comfort and convenience when shopping for food, hence online food delivery is gaining momentum through companies such as Jumia Food.

“With the outbreak of COVID-19, the demand for food rose significantly, especially online food delivery as a result of the lockdown and social distancing guidelines. Many people relied heavily on food delivery as opposed to shopping in grocery markets.

“With over 200 million and an average of 18 years, Nigeria’s population is expected to double over the next 30 years at a growth rate averaging around 2.3 per cent in a year. With its diversification plan from oil production, the country is set to witness growth in a large consumer market such as food and grocery retail market.

“Growth in spending on food and non-alcoholic drinks is witnessing a bump in 2020, as consumers re-priotise their spending patterns towards only essentials. The launch of Jumia late night food delivery, in addition to Jumia Party, which launched in 2017, was a strong boost to food and drinks e-Commerce in 2019,” the report stated.

The food and grocery retail market includes the retail sales of all food products, both packaged and unpackaged, as well as beverages, tobacco and household products, excluding on-trade sales of food and beverages.

Jumia attributed the growth in the demand for food and groceries from 2019, to positive results recorded from e-Commerce, mobile e-Commerce, supported by the growth in the use of mobile phones that are connected to the internet.

Chairwoman, Jumia Nigeria and Group Head of Institutional Affairs, Juliet Anammah, said the e-Commerce firm would continue to address several inefficiencies that exist today in the food value chain by connecting consumers and sellers and providing logistics network for sellers to get products delivered to consumers and enable payment on the Jumia platform.