Pierre: Delivery Business in Nigeria is in High Demand

Co-Founder and CEO of Glovo, Oscar Pierre, spoke about Glovo expansion plan, the business demand and opportunities in Nigeria, as well as the technology driving the Glovo business model. Emma Okonji presents the excerpts:    

As an e-commerce startup company, what is your view about the Nigerian tech ecosystem, what opportunities exist and how can stakeholders like Glovo further develop the ecosystem?

The Nigerian tech ecosystem is super vibrant. I have heard about startups innovation in Lagos and other cities in Nigeria and how investors are willing to invest in the Nigerian tech space.  With the type of innovation that is coming out of Lagos, the city is fast becoming the fastest growing tech hub in Africa and I am excited about the growth and the pool of tech talents and tech companies that are coming out of Nigeria.

Glovo as a global delivery company with presence in Nigeria, depends on the internet and broadband spread. How will you describe access to internet in relation to business?

Ubiquitous access to the internet is a challenge, not only in Nigeria, but also in other countries in Africa and the rest of the world. The development will not stop Glovo from investing in the Nigerian market even though our business growth depends heavily on internet access. Yes there are some challenges in Nigeria, in regards to internet connectivity, but access to the internet is improving and our team is constantly building solutions that are helping stores and couriers to improve on their data plans and internet connectivity.

How will you describe the impact of Glovo business on the Nigerian business environment?

The impact is massive. Our services and solutions are impacting on sellers and buyers on the Glovo platform in Nigeria. Glovo is the first online channel and we partner with supermarkets, where we offer them everything that will enable them do online business with their customers with ease. We offer them with logistics, customer service, and the online platform for transactions. That changes the whole perspective of the business. The restaurants that largely depend on offline customers for their sales, now have online customers who order food online and we deliver to them. So what we have done is to use our solution to offer services to customers and clients and the impact on customers and the Nigerian business is huge.

So what gap is Glovo bridging in the Nigerian e-commerce space?

The e-commerce space in Nigeria is underdeveloped, and this is largely so because I think nobody has been able to build a very solid platform that offers different kind of services that will drive e-commerce growth in the country. So Glovo is trying to bridge that gap by building different categories of services on our platform that are driving e-commerce in the country. Every week, we sign up new restaurants and businesses like groceries, pharmaceuticals, flowers and electronics on our platform and we deliver to customers in minutes. We are also educating the people on the ease of making online orders that will be delivered to their door-steps with ease and in minutes. We deliver thousands of orders on a daily basis and the business is growing gradually and customers are beginning to enjoy our prompt service deliveries.

So what is the current market share of Glovo in Nigeria and what is the expansion plan?

Beginning from countries in sub-Saharan Africa like Kenya, Cote d’Ivoire, Ghana, Rwanda, including Nigeria where we have been operating for some time now, we do have some good market share of our delivery business. Among the African countries where we have presence, Nigeria is the fastest growing market for us at Glovo. We have signed up several partners and customers and the business is doing well in Nigeria. Currently we are operating in three cities in Nigeria, and we plan to expand to more cities soon. We have over one thousand courier operators in Nigeria that are active, the number of restaurants and shops that have signed to our platform are on the increase.

What makes Glovo unique in its service delivery, giving the competitive market that you operate in?

The things that stand us out in our service offering are our products and solutions. In Barcelona, Spain, we have over a thousand tech engineers that are building our products and solutions. They are involved in developing different apps for different service deliveries and our solutions are user friendly and superb and the engineers are innovating all the time and coming out with new solutions that will give customers, partners and clients the best user experience. The solutions are used in Europe and Africa, where we operate and people like our solutions. Again, the way we deliver our services, also stands us out, because we deliver very fast and timely with no mistakes. When the user opens our app, they find all the services they need on our platform.

Are your solutions country specific or the same solutions developed in Barcelona, Spain, are used in all the countries where you operate, including African countries?

We have a global product but we tailored it to country specifics. For example we have to integrate our global payment solution with the Nigerian payment system and solution in order to have a unique payment solution for the Nigerian market.

Glovo business is capital intensive. How easy is it for you to raise funds in driving the business?

Since the inception of the Glovo business in 2015, we have been able to raise as much as Euro1.2 billion, but we started the Nigerian business in 2021. Food delivery is a massive industry in the world and it will continue to grow big because the demand is huge and increasing year-on-year. So the business needs money to grow and be sustained. As far back as seven years ago, the industry started attracting investors because every investor knew that it is a massive industry with potential growth capacity. It is not just about raising funds, but about investors who understand the business, and are ready to invest in the business. I see it as a profitable business and I believe Glovo will become profitable in a couple of years to come. In Nigeria, the business is growing gradually, but we are currently funding it from proceeds of our business from other regions of the world.

What is the level of Glovo business in Nigeria?

We have invested a few million Euros in the Nigerian business since its inception in 2021 and we are still investing. Our investment in Nigeria is channeled towards building the team, the couriers, as well as in marketing and sales. Today we have scaled our operations in Nigeria and we have delivered over a million orders and the growth is impressive. For now we are still investing and we will continue to invest until we grow the market to a sizable level.

How has Glovo been able to manage logistics in Nigeria, in terms of deliveries?

Our logistics are mainly last mile deliveries. All our logistics take place within a specified location, which makes management of our logistics a lot easier. We do not involve ourselves in across-city deliveries, We only deliver orders from one point to another within a particular location and this helps us to manage our motorbikes and riders. So we deliver within 45 minutes within a city.

As CEO, what are your challenges in managing Glovo business globally?

I try to understand what really drives our employees to work with full dedication, and I always find a strategy around that. Globally we have close to 4,000 employees, with thousands of couriers and I try to manage them as much as I can. I spend time making sure that everyone is satisfied on the job. My greatest challenges are funding and the ability to optimise the positives and limit all negatives in our kind of business. The line managers who directly supervise the workers under them have limited budget to operate with. But in the midst of the challenges, I can confidently say that the business is growing and making impacts. For me I see a lot of opportunities in our challenges as a business and nothing will stop Glovo from investing and expanding its business in Nigeria and Africa. I am optimistic that Glovo will sign on new restaurants and shops on its platform going forward.   

At what point did you discover the business opportunities in Nigeria that attracted Glovo to establish in Nigeria?

Glovo started as a food delivery business in 2015 and we discovered that many people liked our business model and we decided to expand the business. While our competitors were focusing mainly on cities, we went beyond cities to underserved areas, and decided to explore the African market and that was the point we saw the huge business opportunities in Nigeria and we established the Glovo business in Nigeria in 2021.

What would you say has been your greatest challenges in doing business in Nigeria?

One of our greatest challenges in doing business in Nigeria is traffic but we are getting over it because we have a strong value proposition for business. The issue of connectivity is also a bit of a challenge, because people need to be connected to the internet to make orders and we need such connectivity to take orders for delivery. The issue of connectivity is not peculiar to Nigeria, as we face same challenges in other regions where we operate.

How has it been convincing investors to raise funds for the Glovo business?

It is quite difficult to raise funds for our business growth, but we have succeeded in raising a lot of funds for the Glovo business since inception.  We have raised series ‘A’ and series ‘B’ funding for Glovo and we are very ambitious in driving the Glovo business. Initially some investors turned down our request for fund raising because they seemed not to understand the growth potential of our business, but few years later, some of them came to us to say they were wrong in their earlier decision and that they were ready to invest in Glovo.

Your background is in aerospace technology, but today you are a big time entrepreneur. What inspired you into entrepreneurial business and what has been your experience so far?

My journey from aerospace technology to entrepreneurial space is an interesting one that is driven by passion. I first worked for a very large aerospace technology company but at a point I became bored because I was no longer enjoying what I was doing there, so I decided to resign and stayed with my parents in Barcelona, while thinking of what to do that I am passionate about. During that period of stay with my parents, the idea to start food delivery business was developed in my head, and I decided to give it a trial. My experience with Glovo has been fantastic because I am passionate about the business and I have been able to build a very strong team that is also driving the business to greater heights. So till date, we have done more with less. So far we are doing well in the delivery business, being the first mover in many markets where we operate. We were also quick to closing operations in countries where the business was not working.

How will you describe business growth at Glovo and at what point did you consider expanding the Glovo business to other markets?

Our growth has been encouraging and has reached double digit growth. Currently we are focusing on signing up new customers on our platform and we have investors that believe in our business model and growth. In the area of expansion, we felt we need to expand very fast because our business is in high demand. In 2018, we built a team of launchers that we hired from different companies and trained them in Barcelona and we sent them out to different countries to survey markets and to launch the Glovo business in markets that are viable.