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It’s food delivery apps’ time to eat

BUSINESS
By Graham Kajilwa | June 15th 2021

The closure of restaurants during the Covid-19 period has not stopped many people from enjoying their favourite dishes as third-party entities in the delivery businesses cash in on the pandemic.

While restaurants have reported losses, some even letting their staff go, delivery apps have had a field day, with more restaurants signing up for their services.

Though some players are cagey on the absolute figures of how many eateries have signed up since the pandemic struck last March, they have confirmed a rise.

“Yes, we saw an increase in the number of restaurants registered compared to 2019. In fact, the number has doubled but I am not at liberty to share the figures,” said Glovo General Manager Priscillah Muhiu.

A report by United Nations Conference on Trade and Development (Unctad) published last November noted that while 58 per cent of businesses selling their own products or services online recorded a drop in monthly revenue, about 64 per cent of third-party marketplaces saw a spike in sales.

This was according to data collected between March and July last year from over 250 companies, most of which have less than 10 employees, across 23 countries among them Kenya.

“We found that wholly digital businesses, especially third-party online marketplaces, have been more resilient during the current crisis,” said Unctad Technology and Logistics Director Shamika Sirimanne.

A follow-up report published in March this year cited social media and own e-commerce shops as the channels that witnessed higher growth since the beginning of the Covid-19 crisis.

“The survey confirms that more customers have gone online to look for essential products. Groceries, pharmaceuticals, health and hygiene products, restaurant delivery, as well as financial services, are the sales categories that saw the largest increases in the Covid-19 crisis through third-party online marketplaces,” reads the survey.

Apart from Glovo and Uber Eats, Jumia Food is the other third-party marketplace that has a food delivery arm, Jumia Eats.

In its 2020 full-year results, Jumia highlighted that the effects of the Covid-19 pandemic played out throughout the year, including in the fourth quarter where the reinstatement of movement restrictions and curfews in selected counties affected logistics flows for the e-commerce business and deliveries for Jumia Food.

The New York Stock Exchange-listed company noted that while overall Covid-19 had a net negative effect on the business in 2020, the pandemic did not lead to a drastic change in consumer behaviour or meaningful acceleration in consumer adoption of e-commerce at a pan-African level.

“On the other hand, movement restrictions due to localised lockdowns and curfews negatively affected supply and logistics, especially in our food delivery business and in the first and second quarters of 2020 in particular,” said Jumia.

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