Lotte Shopping CEO Kim Sang-hyun, left, shakes hands with Ocado Group CEO Tim Steiner after signing of an exclusive partnership contract at Lotte World Tower in Seoul, on Tuesday. Courtesy of Lotte Shopping

By Kim Jae-heun

Lotte Shopping has signed a partnership contract with British-based global retail tech company, Ocado, to become a top online grocery mall here, the company said Tuesday. The company will invest 1 trillion won ($705.06 million) in "smart logistics" specializing in fresh food by 2030 to take a lead in the domestic online grocery market that is valued at about 135 trillion won.

Under the deal, Lotte Shopping will be able to bring in and adopt the Ocado Smart Platform (OSP) to all of its e-commerce sector operations. OSP is a tech solution that encompasses the entire process of shopping for fresh foods online from attracting consumers on mobile applications through to delivery of purchases.

It uses the automated customer fulfilment center (CFC), self-developed robots, artificial intelligence and big data to help retailers carry out rapid and accurate delivery in most efficient way. OSP helped Ocado grew into a company with sales of 2.49 billion pounds (about 4.84 trillion won) last year.

Lotte Shopping plans to build six CFCs over the next eight years, starting with the first one in 2025. The candidates for the "test bed" are southern Gyeonggi Province and Busan.

"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 plans to make big changes to its mobile shopping platform. The previous Lotte ON will collaborate with Lotte Department Store to make it a luxury 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.

Meanwhile, Lotte Group Chairman Shin Dong-bin participated at the partnership signing ceremony held at Lotte World Tower in Seoul, along with Ocado Group CEO Tim Steiner.

"I hope the cooperation between Lotte and Ocado will provide an opportunity for the two companies to grow together," Shin said.