South Korean retailer Lotte has taken its first automated customer fulfilment centre powered by the technology and expertise of British online grocer and technology company Ocado into operation. Located in Busan, the facility serves a catchment of around four million households across South Korea’s second-largest city and its surrounding region.
At the heart of the installation are hundreds of Ocado’s 600 Series robots. The 3D-printed robots operate across the top of a grid, retrieving totes of products stored within the automated hive. According to Ocado, the robots are three times lighter than their predecessors. This lighter grid allegedly reduce installation time by up to 40 per cent and significantly lower installation costs.
Combining robotics with machine learning, multiple grid-mounted arms automatically pick and pack grocery items limiting human intervention. The facility also uses Ocado’s Multi-Temperature Totes, which separate ambient, chilled and frozen products within a single crate. This allows orders to be consolidated while making more efficient use of storage and delivery capacity.
Automation in freezing conditions
The centre also incorporates Ocado’s fully automated freezer where robots operate at temperatures as low as -25 degrees Celsius. This ’Auto-Freezer’ is designed to deliver more than twice the productivity of a traditional manual freezer, the manufacturer argues.
Lotte and Ocado began their partnership back in 2022. Last year, the Ocado Smart Platform was introduced through Lotte Mart’s Zetta online service. This end-to-end platform included web shop functionality, fulfilment software and last-mile routing technology. The Busan Customer Fulfilment Centre is the first of a planned network of six facilities. A second site planned in Goyang, near Seoul, will serve the capital’s metropolitan area.
Big investment, heavy competition
The South Korean e-grocery market is highly competitive, making these new centres strategically important to Lotte’s position. Yet, such an endeavour requires significant upfront capital investment. Elsewhere, several Ocado clients have scaled back their ambitions or closed centres over the recent past, as the economics of automated fulfilment have come under pressure from costs and lower-than-expected volumes.
