Busan, South Korea – Lotte Shopping has announced plans to construct its first customer fulfillment center (CFC) in Busan, utilizing the cutting-edge Ocado Smart Platform (OSP) technology from British retail tech firm Ocado. Construction is slated to begin late next year.
On March 22, Lotte Shopping signed a memorandum of understanding (MOU) with Busan City for mutual cooperation on the CFC project. Busan Mayor Park Heong-joon, Busan Jinhae Free Economic Zone Commissioner Kim Ki-young, and Lotte Shopping Vice Chairman and Co-CEO Kim Sang-hyun attended the signing ceremony held at the Busan City Hall video conference room.
The Busan CFC will be equipped with OSP’s advanced systems, integrating data and artificial intelligence (AI) for demand forecasting and inventory management, as well as efficient delivery and dispatch services. The CFC’s automation of processes from picking and packing to delivery and distribution aims to significantly improve the online grocery shopping experience for Korean consumers by addressing issues such as product spoilage, out-of-stock items, missing products, incorrect deliveries, and late deliveries.
Lotte Shopping estimates the CFC will create over 2,000 stable jobs for logistics center operations and delivery personnel upon completion. Additionally, the project is expected to generate various social values, including the expansion of online sales for local small businesses.
In November last year, Lotte Shopping entered into a partnership agreement with UK-based online retailer Ocado to bolster its competitiveness in South Korea’s domestic online grocery market, valued at KRW 135 trillion (as of 2021). The company invested approximately KRW 1 trillion in collaboration with Ocado, which boasts a world-class online distribution platform.
Lotte Shopping plans to open six CFCs across South Korea by 2030, starting with the Busan facility. The company aims to achieve KRW 5 trillion in domestic online grocery market sales and become the country’s top grocery store by 2032.
Busan Mayor Park Heon-joon expressed gratitude for Lotte’s decision to build its first automated logistics center in Busan and pledged the city’s active support for the CFC construction through various customized policies. Lotte Shopping Vice Chairman Kim Sang-hyun conveyed the company’s excitement to embark on this journey with Busan in pursuit of becoming Korea’s leading online grocery store, promising an innovative shopping experience for Busan and Gyeongsangnam-do residents while fostering local economic development.
