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Nigeria’s online food market to hit $142m by end 2020 amid surging inflation



Nigeria’s online food market to hit $142m by end 2020 amid surging inflation

The value of online food market in Africa’s most populous nation could hit $142 million (N66.740 billion at parallel market rate) before the year winds down, data from the newly released Jumia Food Index 2020 has shown.

Nigeria’s online food market is ahead of countries like Ghana, Kenya, Uganda and Senegal, which represents orders for food and grocery via digital platforms.

The report linked the expansion in Nigeria’s online food market to new generation of Nigerian middle class consumers, who were spending a bigger portion of their disposable income on food and grocery during the coronavirus lockdowns.

“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,” said Massimiliano Spalazzi, CEO of Jumia Nigeria.

No fewer than 63 per cent of Nigeria’s 200 million people spend their income on food, SB Morgen Intelligence said in a recent report, as consistent inflationary pressures weigh on cost of living.

Food inflation in Nigeria touched 17.4% in October, its highest point since February 2017, according to the National Bureau of Statistics.

Spalazzi said the coronavirus outbreak did not only prove that online food delivery could be not just a commodity but a necessity.

He predicted that more people would rely more significantly on having their meals and groceries delivered to their doorsteps by online food markets in contrast to visiting offline retail shops to purchase such items as the world continue to confront COVID-19.

Read also: BUSINESS REVIEW: How prevalence of fake consumer products is killing the Nigerian market

The global food grocery and retail market reported total revenues of $44.9 billion, equivalent to a compound annual growth of 8.7 per cent in the past eight years.

The report observed that online food market and retailing would keep enlarging as consumers find comfort and convenience when shopping for 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,” the report said.

Online food market could be boosted as Nigeria approaches the festive season of Christmas and the New Year celebrations.

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