New deal will see multi-storey Ocado CFCs for the first time

LOTTE GROUP is one of the largest business conglomerates in South Korea, with interests spanning retail, food, hotels and chemicals, with a total annual revenue of 75 trillion KRW (£45bn). Lotte Shopping, the largest retail affiliate of Lotte Group, operates department stores, hypermarkets, supermarkets and e-commerce in South Korea, with more than 1,000 stores nationwide and an annual revenue of 15.6 trillion KRW (£9.5bn). 

Under this agreement, Ocado and Lotte will develop a network of Customer Fulfilment Centres (CFCs) across the market, underpinned by the end-to-end capabilities of the Ocado Smart Platform. Ocado's in-store fulfilment (ISF) solution will also be rolled out across Lotte's store estate. 

The agreement plans for the development of a nationwide fulfilment network, with 6 CFCs planned by 2028. CFCs will cover multiple geographies and cater to a wide range of online grocery missions. The plan is to implement ISF in 2024, with the first CFC due to go live in 2025. 

This partnership will also bring new technologies announced at Ocado Re:Imagined to Lotte's operations, and it will introduce multi-storey CFCs for the first time. This innovation features OSP grids installed on multiple levels, unlocking a wider range of property types for CFCs and enabling more efficient use of space in densely built environments. 

The structure of fees agreed with Lotte are similar to those agreed with other international Ocado Solutions partners. Lotte will pay Ocado Solutions certain fees upfront and during the development phase, then ongoing fees linked to both sales achieved and installed capacity within the CFC and service criteria. 

The partnership is exclusive in South Korea on the basis of Lotte ordering an agreed schedule of CFC capacity and in the longer term meeting mutually agreed market share targets. 

Lotte Shopping CEO Kim Sang-hyun, said: “This partnership with Ocado, one of the most innovative companies worldwide, will be a great opportunity for Lotte Shopping to provide our customers with a new online grocery shopping experience. Also I expect this will be the first step for us on the way not only to increasing our competitiveness and presence in the e-grocery market, but also to achieving the leading position in the overall grocery market in Korea." 

Ocado Group CEO Tim Steiner, added: “This partnership brings the Ocado Smart Platform, the most advanced technology for serving online grocery, to one of the most mature eCommerce markets in the world. I'm delighted to welcome Lotte to the innovative group of retailers developing their online operations with Ocado. With this new partnership, our unique, proprietary technology will now power the online businesses of twelve major retailers across ten countries worldwide.”

For more information, visit www.ocadogroup.com/about-us/ocado-solutions