Nigeria’s food delivery market faces challenges

Nigeria’s food delivery market is still in its early stages, with delivery platforms accounting for only about 1% of the country’s spending on food prepared outside the home. This is significantly lower than comparable markets in Africa, where the figure is closer to 5-7%, and in South Asia and South America, where it rises to 10-15%.

According to Demola Adesina, Country Manager at Swoop Limited, the appeal of convenience is obvious, but the economics of accessing it are a major factor. In Lagos, for example, consumers have a range of options for buying prepared meals, including ordering through a delivery platform, walking to a nearby restaurant, buying from a local food seller, or contacting their favorite restaurant directly.

Understanding the Real Competition

Each of these options comes with a different combination of cost, convenience, and reliability, and delivery platforms must offer sufficient value to justify the final bill. This is particularly important in Nigeria, where consumers are dealing with rising living costs and making increasingly deliberate spending decisions.

A customer may appreciate the ease of having lunch delivered, but may not be willing to pay a significant premium for it every day. The challenge for the industry is to make food delivery an option that customers can comfortably choose again and again, rather than just persuading them to download an app.

From First Orders to Lasting Habits

Promotional offers can encourage someone to try a platform for the first time, but there is a difference between encouraging someone to place their first order and giving them a reason to place their tenth. For delivery to become a regular habit, customers need to feel comfortable with what they are paying, even when there is no special offer available.

This requires platforms to think carefully about pricing, efficiency, and the overall experience, rather than relying on discounts as the primary driver of demand. It also requires looking beyond the customer to the other parties involved in the delivery process, including the restaurant preparing the meal and the rider delivering it.

A delivery platform cannot build a sustainable business by solving the problem for one group while creating another for everyone else. Lower prices may attract customers, but restaurants still need healthy margins, and riders must also be able to earn a decent living.

At Swoop, the approach is built around this principle, with customers able to see applicable delivery and service charges before confirming an order, and restaurants benefiting from lower platform costs and additional opportunities to reach customers. Riders are also able to retain 100% of their delivery fees.

These decisions are connected, and the goal is to create a service that customers can afford to use regularly, restaurants can benefit from, and riders can earn a living through. The objective is not simply to offer the lowest possible price, but to create a service that works commercially for everyone involved.

The biggest opportunity for the industry may lie beyond the customers that platforms currently serve, with the person who orders occasionally but would happily order more often if the economics made sense. This includes the restaurant that has a loyal customer base but has yet to make delivery a meaningful part of its business, and the customer who has never considered using a delivery platform because buying food nearby has always seemed the more practical option.

These customers do not need to be convinced that convenience has value, but rather need a delivery experience that fits their expectations and spending power. The gap between Nigeria and other emerging markets is significant, and even a modest increase in adoption could represent a meaningful expansion of the market.

But this growth will not come simply from competing more aggressively for the same customers. It will require platforms to understand how Nigerians make everyday purchasing decisions and build services that reflect those realities. The next challenge is making the benefits of food delivery accessible to more people, more often, with affordability playing an equally significant role in determining how widely it is adopted.

A service represents good value when customers are comfortable paying for it, restaurants can earn healthy margins, and riders can make a decent living. For an industry with considerable room to grow, this distinction matters, and it is the future that Swoop is working to build.

Making Food Delivery a Practical Choice

The real opportunity is not simply to persuade Nigerians to order more food online, but to make food delivery such a practical and worthwhile choice that more people naturally incorporate it into their everyday lives.