Jumia’s Nigeria Food Index Shows Growth in Online Delivery
Jumia has published its first Nigeria Food Index, showing the impact of the coronavirus (COVID-19) pandemic on food trends in Nigeria. The report, released today, shows that the online food delivery is changing habits in unexpected ways for businesses and consumers due to the pandemic. It further shows that the growing popularity of fast food, coupled with the growing trends for convenience and value for money, have opened up opportunities for the food market in Nigeria.
The report indicates that the country’s agricultural sector experienced a major boom in 2019, significantly responsible for the 90.23 percent contribution made by non-oil sectors to Nigeria’s GDP. The index further shows that the food and grocery retail market had total revenues of $44.9 billion, representing a compound annual growth rate (CAGR) of 8.7 percent in the last eight years.
Similarly, the report indicates that overall grocery retailing continues to expand, as consumers seek comfort and convenience when shopping for food. The food segment was the market’s most lucrative, with total revenues of $33.7 billion, equivalent to 75 percent of the market’s overall value. Also, online food delivery is gaining momentum through companies such as Jumia Food. With the outbreak of the COVID-19 pandemic, the demand for food rose significantly, especially online food delivery as a result of the lockdown and social distancing guidelines. This was because many people relied heavily on food delivery as opposed to physical shopping in grocery markets.
The report highlighted two major drivers of the growth observed in 2020 – demography and the COVID-19 lockdowns. While with a growing population averaging 18 years old, a new generation of Nigerian middle class consumers are spending more money online on food and grocery services, the lockdowns induced by the COVID-19 pandemic also contributed to this evolution in habits.
The report further highlighted that, while most restaurants are popular in Lagos, Abuja, Port Harcourt and Ibadan, Lagos leads in terms of volume of online food orders. It also shows, among others, that pizza, Chinese and shawarma are the most promising cuisines; lunch leads in the time of orders with 65 percent; weekdays record the biggest volume in orders, peaking on Wednesday at 16 percent; males place more orders (56 percent) than females (44 percent); and Port Harcourt leads in delivery timing at 26 minutes.
The Index also shows that, while Kentucky Fried Chicken (KFC), Cold Stone Creamery and Pizza Hut come out as the most popular international brands in the country due to consumers’ proclivity to chicken-related orders, Chicken Republic, The Place, Kilimanjaro, Sweet Sensation and Drumstick are the most popular local food vendors due to the affordability of their offers.
Jumia, the leading e-commerce platform in Africa, explains that the positive trend recorded in the agricultural sector offers the prospect of increased jobs, greater prosperity, reduced hunger and improved opportunities for Nigerian farmers and entrepreneurs to participate in the global economy. Over the years, Nigeria’s growing online audience has seen an increase in international brands setting up shop to tap into the growing middle-income segment. Direct investments from players such as KFC, Cold Stone Creamery and Pizza Hut have been achieved.
Online food delivery players such as Jumia have also played a key role in shaping supply chains and opening up the markets to new entrants. Local producers and restaurants have embraced this evolution and reached new consumers as well as grown their businesses in spite of these challenging times.
“This pandemic crisis has shown the world that online food delivery is not just a commodity, but a necessity. The food business adapted quickly to the new normal, by availing contactless and cashless deliveries,” said Shreenal Ruparelia, Chief Commercial Officer, Jumia Food.
“We also started to provide support to local food vendors to keep their businesses running during this difficult time. With our food partners, we will continue to deploy capabilities across the food value chain to ensure consumers buy food online safely and at the right price, in line with the theme of this year’s World Food Day celebration of ‘Grow, Nourish, Sustain Together,'” added Shreenal.
Nigeria’s population is expected to double over the next 30 years at a growth rate averaging around 2.3% a year. With its diversification plan from oil production, the country is set to witness growth in a large consumer market, such as the food and grocery retail market.
Jumia Food is Africa’s largest Food delivery company operating in 9 countries in the continent. The consumers can order restaurant meals, groceries, drinks, pharmacies, and supermarkets, having then delivered in less than 45 minutes.