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OyaNow's Bold Move to the Affluent Market
OyaNow, a seven-year-old food delivery startup in Nigeria, is aiming to break even by Q1 2026 by shifting its focus from the mass market to a more affluent audience. This strategic pivot comes as a response to the challenges faced by various competitors like Jumia Food and Uber Eats, who have exited the market due to unsustainable practices. According to founder Abbas Dayekh, the company now targets high-income consumers who are less sensitive to prices and more likely to remain loyal to quality service.
The Logic Behind Targeting the Top 1%
Dayekh emphasizes that while many food delivery services compete on low prices, this often leads to a cycle of debt and disloyalty among customers. “I had to make a forceful choice to tailor to the rich,” he stated, illustrating a growing trend among startups to move away from price wars towards cultivating relationships with high earners. This is echoed by Busola Akin-Olawore from Versa Research, who notes that affluent customers are not swayed by discounts.
Diverse Revenue Streams: A Strategic Expansion
OyaNow is not only focusing on food delivery but is also diversifying its services, introducing offerings like logistics and errands through its upcoming “Oya Concierge” service on WhatsApp. This creative expansion allows the company to tap into various income streams, catering to a clientele that prioritizes convenience over cost.
The Competitive Landscape and Market Share
While establishing a narrower customer base than rivals like Chowdeck, OyaNow claims to maintain a stronger market presence among affluent users, fostering partnerships with high-end vendors, leading to higher average basket values. For instance, OyaNow’s average order amount is significantly larger than that of its competitors, reinforcing the potential profitability of its focused approach.
Future Predictions for Food Delivery in Nigeria
As more Nigerian startups learn from OyaNow's strategy, they might also shift their strategies towards targeting affluent consumers. Industry experts predict that this could lead to a more sustainable future for food delivery businesses in Nigeria, characterized by loyalty and consistent revenue.
In a rapidly transforming digital landscape, understanding how businesses adapt is crucial for investors and entrepreneurs. Staying ahead of trends in automation and fintech will empower the next wave of startups across Africa.
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