Ocado signs partnership deal with South Korea’s Lotte Shopping

1st November 2022

Georgia Wright

Ocado agrees partnership deal with South Korea's Lotte Shopping

Ecommerce Grocery

// Ocado Solutions and Lotte Shopping signal deal to develop Lotte’s online business in South Korea

// Under the new agreement, Ocado and Lotte will develop a network of Customer Fulfilment Centres across the market

Online supermarket and technology group Ocado has agreed on a partnership deal with South Korea’s Lotte Shopping, its first in that country.

The deal will see Ocado and Lotte develop a network of robotic warehouses, also known as Customer Fulfilment Centres (CFCs), across the South Korean market.The agreement plans for the development of a nationwide fulfilment network, with 6 CFCs planned by 2028.In a statement, the companies said the CFCs will cover multiple geographies and cater to a wide range of online grocery missions. “We plan to implement ISF in 2024, with the first CFC due to go live in 2025.”

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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 £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 £9.5bn.

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 to enable more efficient use of space in densely built environments.

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.

Ocado Group said it “expects this deal to create significant long term value to the business.”

The impact of this transaction will be negligible on earnings in the current financial year as no cash fees will be recognised in revenue until operations commence.

Ocado Group chief executive Tim Steiner said: “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.”

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Ecommerce Grocery