South Korean retail brand, Lotte, and Ocado have launched their first automated customer fulfilment centre (CFC), which will serve a catchment covering 4m households across Busan and the broader Yeongnam region.
The Busan CFC introduces multiple innovations, including the launch of Ocado’s fully automated freezer (“Auto-Freezer”), bringing Ocado’s proprietary ‘hive and bot’ automation into temperatures as low as -25° C. The Auto-Freezer is expected to achieve more than double the productivity of a traditional manual freezer. The site will also support dawn delivery, enabling freshly packed grocery orders to reach customers’ homes before 7am. This delivery option is a significant and unique characteristic of the South Korean market.
The site is also expected to be the most environmentally efficient Ocado CFC in the world, supporting a 100% Electric Vehicle fleet for daytime deliveries and operating more energy efficient 3D-printed bots, with multi-temperature totes to maximise storage density for delivery. The widespread installation of solar panels is expected by Lotte to reduce annual carbon emissions by over 1,000 tonnes.
South Korea’s online grocery market has grown rapidly in recent years. According to Statistics Korea, online grocery transaction value surged from KRW 17.17 trillion (approx. £8.7 billion) in 2019 to KRW 52.3 trillion (approx. £26.5 billion) last year, representing a compound annual growth rate of 20.4%. Online penetration is now 28% of total grocery retail sales, significantly higher than the majority of major grocery markets worldwide.
Nick De La Vega, Chief Revenue Officer, Ocado Group, said:
“This is another major milestone for Ocado as we launch one of our most advanced CFCs to date in one of the world’s leading markets for grocery e-commerce. Online is fast becoming the main grocery channel for many customers across South Korea, and we are excited to help Lotte deliver a step-change in the choice, service and experience it offers shoppers.”
Cha Woo Chul, Chief Executive Officer, Lotte Mart & Super, said:
“ZETTA Smartcenter Busan is a next-generation online logistics center combining Lotte Mart’s fresh food expertise with UK Ocado’s AI robot logistics technology. By delivering farm-fresh produce on schedule to 4 million households in the Yeongnam region, we will reshape the paradigm of domestic online grocery shopping.
“Backed by world-class robot automation technology, eco-friendly management, safety control, and the creation of 2,000 local jobs, we will establish a model of a trusted, sustainable future logistics center for customers in the Yeongnam region.”
