Ocado is taking its robotic ecommerce solutions to South Korea through a partnership with multichannel Lotte Shopping that will see the UK retail and technology business deploy multi-storey robotic customer fulfilment centres for the first time.
The partnership will start in 2024 by using Ocado’s in-store fulfilment solution to deliver online orders from Lotte’s more than 1,000 stores – from department stores to hypermarkets. Between 2025 and 2028 the two are set to open six customer fulfilment centres. The new centres will include the first use of multi-storey Ocado robotic grids, designed to enable more efficient use of space in densely-built environments. The partners say that other technologies from the Ocado Reimagined programme unveiled earlier this year – which stretched from virtual distribution centres to its 600 series of bots to on-grid robotic picking – could also be deployed through the partnership.
Kim Sang-hyun, chief executive of Lotte Shopping, says: “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.”
The agreement will be exclusive in South Korea on the basis of Lotte ordering an agreed schedule of fulfilment centres, and meeting market share targets in the longer term. Lotte will pay some fees upfront and during the development phase. Ongoing fees will then be linked to sales, installed capacity and service criteria. Most of Ocado’s capital investment is expected to take place in the 12 months before each fulfilment centre opens, starting in 2025.
Tim Steiner, CEO of Ocado Group, says: “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.”
Luke Jensen, CEO of Ocado Solutions, says: “South Korea is among the most developed and dynamic markets for grocery ecommerce in the world. Lotte is a powerhouse grocery player in the market, with deep connections to its customers and the ambition to dominate the ecommerce channel in grocery. We can’t wait to introduce a game-changing proposition to Korean shoppers with Lotte.
“This partnership also gives Ocado another important foothold in Asia Pacific as we target further growth across the region.”
Lotte Shopping turns over 15.6 trillion KRW (£9.5bn) a year, and is part of the 75 trillion KRW (£45bn) Lotte Group conglomerate, whose interests span retail, food, hotels and chemicals.