How to Setup an Online Food Delivery Store in Nigeria

There is a growing trend among Nigerian corporate employees during lunch break which is to make orders for food deliveries to their work places. Most businesses have strict work rules which their employees try to obey among which is the one hour break period during office hours. There are consequences when workers violate these rules. But then there the unpredictable nature of city traffic plus the stress of leaving your office to a nearby eatery can have telling effects on one’s productivity. So why not overcome this by resting at work for say 30 minutes and have someone deliver lunch to you, saving you stress, time and the risk of upsetting your boss when you have to ‘adjust to work after lunch out? Moreover these days people are becoming super busy with work and appointments. The business solution is to bring lunch to workers at their work place.

The Market Opportunity for Food Delivery Service in Nigeria at a Glance
Trends	Growing demand for office and home food deliveries exist because people are becoming more cosmopolitan. Families more nuclear, household income increasing, parents ever busy with corporate jobs, work schedule of workers becoming even tighter (leave for work early and return late from work) among others. These means this set of people must have food delivered to their offices or homes since they must eat but lack the time to cook.
Market Size                         Leading Brands Key Locations	This is hard to estimate but my findings reveal 120,000 people will use this service at least 2 times a week in the city of Lagos alone, whereas Abuja has potentially 18,000+ service users                                                                                                                                          Jumia Foods, Mr Delivery, Kilimanjaro, Chicken Republic                                                                                                              Surulere, Ikeja, Lekki, Ikoyi, Wuse 2, Asokoro, CBD, Garki, Wuse, Maitama

Future Outlook for Food Delivery Service in Nigeria (2019 – 2025) 

The business is just new and still evolving (since early, 2011 when the first operators started aggressively marketing the service) but is also growing rapidly. People will sign up with time as the business environment becomes more competitive, as cities become more populated and incomes continue to rise there will always be opportunities for food service deliveries made to homes and offices. Key points to note;

• Lagos, Abuja and Port Harcourt are rapidly urbanizing and these are the main hubs for this service in Nigeria
• A strong entry now into this segment will position a business for strong income and profit making within the next 5 years, as historically new business trends show that Nigerian consumers are quick to key into something once it is proven to be effective and consistent.
• The use of mobile technology (Mobile Apps, cheaper and more sophisticated smart phones) and quick dispatches means the business can be run inexpensively as well
• Marketing costs will progressively decline for operators with strong brand presence within the market
• Large corporate deliveries will gradually start taking form creating more business opportunities for operators

Challenges of Food Delivery Service in Nigeria

There are 8 identified challenges that could threaten the success of this business. One very significant challenge is technical glitches from internet services providers which may slow down the network thus delaying the processing of orders thus affecting sales and business efficiency. There is also the problem town planning which makes delivery awkward for inexperienced dispatchers. The remaining 6 challenges explained in detail upon request (see end of blog post)

Sample Financial Analysis for a Medium Scale Food Delivery Service in Nigeria

Startup Cost Breakdown
Item	Cost
4 Dispatch Bikes Branding Cost Office Setup Rent Mobile APP 3 Months Salaries Contingency Other expenses   Total	600,000 480,000 780,000 600,000 900,000 1,200,000 550,000 900,000 6,210,000

 
First Year Sales

• Gross Sales                            21,600,000
• Gross Profit                           11,640,000
• Operating Expenses               7,290,000
• Profit before Tax                    4,350,000
• Profit after Tax                       3,045,000                 
• Retained Earnings                  1,045,000
• Breakeven Month                   9^th or 10^th
• Breakeven Revenue                17,250,000
• Payback                                  2 years and 3^rd month at most

If you need a business plan on setting up and running a viable food delivery service in Nigeria with a detailed and customized blueprint to compete and thrive call me on: 0803 206 4106 or email me: paulonwueme@gmail.com for details