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Shin Dong-bin, the chairman of Lotte Group, and Tim Steiner, the CEO of Ocado Group, were both at the signing ceremony, which took place at Lotte World Tower in Seoul. | Credit: Lotte
Lotte Shopping announced that it has signed a partnership agreement with Ocado, a global retail technology company based in Britain, to enhance its online grocery solutions in Korea. The company will invest 1 trillion won ($705,060,000) by 2030 in “smart logistics” that focuses on fresh food to lead the 135 trillion won domestic online grocery market.
Under the terms of the deal, Lotte Shopping will be able to use the Ocado Smart Platform (OSP) for all of its online shopping. OSP is a technology solution that covers the whole process of buying fresh food online, from attracting customers through mobile apps to delivering orders.
It uses an automated customer fulfillment center (CFC), robots it built itself, artificial intelligence, and big data to help retailers do fast, accurate delivery in the most efficient way. OSP helped Ocado grow into a business that made about 4.84 trillion won ($2.49 billion) in sales last year.
Over the next eight years, Lotte Shopping plans to build six CFCs. The first one will open in 2025. The southern part of Gyeonggi Province and Busan are two places that could be the “test bed.”
“We are not only talking about our department stores, supermarkets or online shopping mall Lotte ON, for which we want to seek new changes together with Ocado. The group’s retail HQ department is working on an overall strategy. We plan to build a completely new online platform specializing in the e-commerce sector,” a Lotte Shopping official said.
Lotte wants to make big changes to its platform for mobile shopping. The old Lotte ON will work with the Lotte Department Store to turn it into a high-end online mall.
“We will also establish an integrated sourcing system that allows people to purchase products together from local farms. Lotte will be the only company that integrates on-and-offline grocery stores,” the official added.
Shin Dong-bin, the chairman of Lotte Group said: “I hope the cooperation between Lotte and Ocado will provide an opportunity for the two companies to grow together.”
