Lotte Shopping to Build 'Ocado Center' in Busan... Strengthening Business Competitiveness

Busan City and CFC Sign Investment Agreement
Logistics Center Scheduled for Completion in 2025
Expectations for Revitalizing Busan Regional Economy

Lotte Shopping is partnering with the UK retail tech company 'Ocado' to unveil its first state-of-the-art logistics center in Busan. This move is seen as a full-scale effort to strengthen competitiveness in the domestic online grocery business.

On the 22nd, Lotte Shopping announced that it will sign an investment agreement (MOU) with Busan City focused on mutual cooperation for the construction of a Customer Fulfillment Center (CFC).

Lotte Shopping has selected Busan as the location for the first CFC applying Ocado's cutting-edge solution, the Ocado Smart Platform (OSP), and plans to begin construction by the end of 2023. Once the automated logistics center equipped with advanced technologies such as artificial intelligence (AI) and robotics is completed in 2025, it is expected to introduce an advanced automated logistics system to approximately 2.3 million households in Busan, Changwon, and Gimhae, as well as contribute to revitalizing the local economy in Busan through job creation.

Inside view of Ocado UK's automated logistics center.
[Photo by Lotte Shopping]

The Busan Gangseo-gu International Industrial Logistics City, selected by Lotte Shopping as the site for the CFC, is a logistics cluster established through active corporate attraction efforts by Busan City and the Busan-Jinhae Free Economic Zone Authority, aiming to become a global logistics hub. The Lotte Shopping Busan CFC is expected to be the first online grocery-dedicated automated logistics center in the Busan area. With a site area of approximately 40,000㎡, it can handle over 30,000 deliveries per day, providing an enhanced shopping experience not only for Busan but also for customers in surrounding areas such as Changwon and Gimhae.

The Busan CFC will incorporate all advanced systems of the OSP. Thorough demand forecasting and inventory management based on data and AI, as well as efficient delivery and dispatch services, will be organically connected. All processes from picking, packing, delivery, to dispatch will be automated. This is expected to dramatically improve inconveniences that domestic consumers have experienced during online grocery shopping, such as product spoilage, stockouts, missing items, wrong deliveries, and delayed shipments.

It is also expected to contribute to regional economic revitalization through job creation and expansion of local product sales. Lotte Shopping anticipates that once the CFC is completed, more than 2,000 stable jobs will be created in logistics center operations and delivery personnel. Additionally, it is expected to generate various social values such as expanding online sales channels for local small businesses through sourcing and selling local products and fostering mutual growth.

Park Hyung-jun, Mayor of Busan, said, “We are grateful that Busan was chosen as the first site for the state-of-the-art automated logistics center,” and added, “We will actively support the construction of the Lotte Shopping CFC with various customized policies.”

Kim Sang-hyun, Vice Chairman and CEO of Lotte Shopping, said, “We are very pleased to take the first step toward Lotte’s goal of becoming ‘Korea’s No.1 online grocery destination’ together with Busan City,” and added, “Through innovative systems, we will provide a new shopping experience to citizens in the Busan and Gyeongnam regions and strive for regional economic development.”

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