Ocado strikes tech deal with South Korean retail giant Lotte

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Ocado Solutions, the online group’s technology division, has struck a deal with South Korean business Lotte, which will deploy its Smart Platform.

Ocado warehouse technology

Ocado has penned a deal to supply its technology services to South Korean retailer Lotte

Ocado and Lotte will open six customer fulfilment centres (CFCs) in South Korea. Lotte will also roll out Ocado’s in-store fulfilment technology across its estate.

Ocado’s in-store fulfilment will be implemented in 2024 and the CFCs, which “will cover multiple geographies and cater to a wide range of online grocery missions”, will start to go live a year later.

Ocado Solutions chief executive Luke Jensen said: “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.”

Ocado expects the tie-up to “create significant long-term value” – cash fees will only be recognised in revenue once operations begin. The deal will necessitate additional capital expenditure by Ocado, mainly in the 12 months up to the opening of CFCs.

Lotte Group is one of South Korea’s biggest conglomerates. The Lotte Shopping division, which includes department stores, hypermarkets, supermarkets and ecommerce, runs approximately 1,000 stores nationwide and generates annual revenue of KRW15.6trn (£9.5bn).