"Lotte Shopping Invests 1 Trillion to Leap as Grocery No.1, Partners with UK Okado"

Lotte Shopping Partners with Global Retail Tech Company Ocado
'Providing Customers with the Best Online Shopping Experience'... Introducing Ocado's Advanced Solution (OSP)
Automated Logistics Center to Open in 2025, Targeting 5 Trillion KRW Sales in Online Grocery Market by 2032

(From left) Kim Sang-hyun, Vice Chairman and General Manager of Lotte Distribution Group, and Tim Steiner, CEO of Ocado Group, are taking a commemorative photo after signing a partnership agreement to strengthen online grocery competitiveness at Lotte World Tower in Songpa-gu, Seoul. Photo by Lotte Shopping.

[Asia Economy Reporter Yuri Kim] Lotte's retail group has declared itself the number one player in Korea's online and offline grocery market and will invest 1 trillion KRW to strengthen its logistics solution competitiveness. Partnering with the UK retail tech company 'Ocado,' they plan to open an automated fulfillment center (CFC) in 2025 and aim to achieve 5 trillion KRW in sales in the online grocery market by 2032.

On the 1st, Lotte Shopping announced that it signed a partnership agreement with UK-based global retail tech company Ocado to collaborate on the domestic online grocery business. Through this agreement, Lotte Shopping will introduce the integrated solution 'Ocado Smart Platform (OSP),' which covers the entire process of online grocery ordering and delivery, and will actively strengthen its competitiveness in the domestic online grocery market.

In July, Lotte's retail group established a new vision as the 'customer's first shopping destination,' moving away from managing portfolios by distribution channels to maximizing synergy among related businesses under the broad themes of 'lifestyle' and 'grocery' from the customer's perspective, aiming to create a better customer experience. Through the partnership between Lotte Shopping and Ocado, Lotte's retail group plans to target the domestic online grocery market and simultaneously strengthen competitiveness in fresh food based on integrated sourcing, with the goal of becoming the most trusted and enjoyable 'number one grocery destination' for customers.

Starting as an online supermarket without physical stores in the UK, Ocado has grown into one of the world's top online distribution companies in about 20 years through the development of automated online delivery systems. Recently, building on this success, Ocado has been operating the end-to-end integrated solution 'Ocado Smart Platform (OSP),' which handles the entire online grocery ordering and delivery process?from demand forecasting to picking and packing at automated fulfillment centers, delivery, and dispatch?using cutting-edge technology. OSP helps retailers efficiently carry out fast and accurate deliveries by utilizing automated fulfillment centers (CFC), proprietary robots, artificial intelligence (AI), and big data. Currently, major global retailers such as Kroger in the US, Sobeys in Canada, and Coles in Australia have partnered with Ocado and adopted this solution.

Through this partnership, Lotte Shopping plans to open its first CFC in 2025 and expand to six CFCs by 2030. The goal is to achieve 5 trillion KRW in sales in the domestic online grocery market by 2032. A separate platform enabling personalized marketing based on individual purchase history and preferences will also be launched. Lotte Shopping expects that by adopting OSP, it will dramatically improve common inconveniences experienced by Korean consumers in online grocery shopping, such as product spoilage, stockouts, missing items, wrong deliveries, and delayed deliveries, while building a big data-based customized online shopping environment.

With the introduction of the CFC, which incorporates Ocado's technology, the types of products that can be stored will more than double compared to before. Customers will be able to order a wider variety of products at once and receive them without stockouts or missing items. With 33 dispatches every hour, customers can specify exact delivery times and receive their orders without delay. Ocado's online supermarket operations in the UK achieve on-time delivery and shopping cart accuracy rates of over 97%. Similarly, Sobeys in Canada, which operates with Ocado's OSP through a partnership, achieves on-time delivery and shopping cart accuracy rates of 98%. Lotte Shopping plans to invest about 1 trillion KRW by 2030 for the adoption and operation of Ocado's OSP.

Lotte Shopping will cover costs for CFC sites, construction, and OSP usage fees, while Ocado will provide hardware such as robots and grids for automated fulfillment within the CFC, as well as operational software, and will continuously handle maintenance. Ocado plans to support efficient operation of OSP by developing additional technologies tailored to the characteristics of Korea's online grocery market, where deliveries must be made in densely populated urban areas.

This content was produced with the assistance of AI translation services.