Grocery technology firm Ocado has struck a partnership with South Korean business conglomerate Lotte Shopping to develop the latter’s online offering.
Ocado expects the deal to create “significant long-term value”, with the impact of the transaction likely to be “negligible” on earnings in the current financial year as no cash fees will be recognised in revenue until operations commence.
The structure of fees was said to be similar to those agreed with other international Ocado Solutions partners, with Lotte set to pay Ocado Solutions certain fees upfront and during the development phase, then ongoing fees linked to both sales achieved and installed capacity within the customer fulfilment centres and service criteria.
Under the agreement, Ocado and Lotte will develop a network of customer fulfilment centres across South Korea, with six planned by 2028, all of which will be underpinned by the end-to-end capabilities of the FTSE 100-listed group’s Smart Platform. Ocado’s in-store fulfilment solution will also be rolled out across Lotte’s store estate.
Ocado chief executive Tim Steiner said: “This partnership brings the Ocado Smart Platform, the most advanced technology for serving online grocery, to one of the most mature e-commerce markets in the world. I’m delighted to welcome Lotte to the innovative group of retailers developing their online operations with Ocado.
“With this new partnership, our unique, proprietary technology will now power the online businesses of twelve major retailers across ten countries worldwide.”
As of 0820 BST, Ocado shares had surged 21.62% to 574.55p.
Reporting by Iain Gilbert at Sharecast.com
