In a move that could signal a foray into advertising, Glovo recently displayed an ad for Jollof+, a savings product, to a user who completed a purchase on the platform.
This development comes on the heels of reports that rival Chowdeck is building a similar service, setting the stage for an intense competition to capture the attention of Nigerian users.
There's a growing need for convenience as Nigeria's largely youthful population gets into the workforce. Startups like Glovo have capitalised on this by building successful businesses around food delivery and logistics. But that comes with peculiar challenges.
Notorious for its thin margins, food and grocery delivery players in Nigeria have had to deal with the effects of sky-high inflation in the country lately. Operating costs have also risen following the removal of fuel subsidies in May 2023, and there have been exits.
Consequently, businesses have had to innovate. Glovo, for example, has invested in electric bikes, which, although more expensive to acquire, are cheaper to maintain than petrol-powered bikes.
Offering advertising services may be another way to increase revenue and strengthen its market position. It already offers advertising services to the businesses it works with via the Glovo Partner programme, but opening it up to more businesses could be a master stroke.
Confirming the development, a Glovo spokesperson shared that the company has been exploring advertising solutions across the 23 countries where it operates to "connect brands with customers at key moments of their journey."
"At Glovo, our unwavering commitment to innovation is central to our mission as a pioneering multi-category app. We continuously seek to create value for both our users and brand partners, ensuring that our platform delivers impactful, tech-driven experiences," she shared.
Its user numbers are not public, but given the frequency with which its riders are seen across Lagos, its primary market, it's safe to say those numbers are close to those of Chowdeck (the three-year-old has 500,000 users).
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As we argued in this article, those numbers and the high purchase intent of most users make it an exciting prospect for most marketers.
Many may not know that this isn't Glovo's first run in advertising. In September 2023, the food delivery service launched Glovo Ads, an offering designed to amplify brands, restaurants, and shops to Glovo users through in-store banners, sponsored search on the app and programmatic advertising off the app.
If successful, the ad service could become a model for food and grocery delivery startups. More importantly, it could offer hope in an industry that has often left investors wondering how it could recoup the huge investments made.
In all this, customers are the biggest beneficiaries. The battle to deliver valuable outcomes for businesses could force players to improve personalisation for users. But regardless of how it plays out, this will make for an interesting show.
"We look forward to seeing how this development enhances the experience for both users and partners, and we’re also excited to explore potential collaborations with brands looking to leverage these innovative advertising solutions."
