Ocado Group plc announced the signing of a partnership between Ocado Solutions ("Ocado") and Lotte Shopping ("Lotte") to develop Lotte's online business in South Korea with the Ocado Smart Platform ("OSP"). Under this agreement, Ocado and Lotte will develop a network of Customer Fulfilment Centres ("CFCs") across the market, underpinned by the end-to-end capabilities of the Ocado Smart Platform. Ocado's in-store fulfilment ("ISF") solution will also be rolled out across Lotte's store estate.

The agreement plans for the development of a nationwide fulfilment network, with 6 CFCs planned by 2028[1]. 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.

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. This innovation features OSP grids installed on multiple levels, unlocking a wider range of property types for CFCs and enabling more efficient use of space in densely built environments. The structure of fees agreed with Lotte are similar to those agreed with other international Ocado Solutions partners.

Lotte will pay Ocado Solutions certain fees upfront and during the development phase, then ongoing fees linked to both sales achieved and installed capacity within the CFC and service criteria. 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.