Ocado signs first Asian grocery client Aeon

Japanese grocer Aeon has signed a deal with Ocado to use its Ocado Smart Platform (OSP).

In its first Asian partnership, Ocado will develop Aeon’s online grocery business. The retailer operates over 21,000 stores in 14 countries, with 580,000 staff and 100 million customers. 

The agreement will see the pair create a national fulfilment network to serve the entire Japanese market, with a potential of around 600 billion JPY of sales by 2030, growing to approximately 1 trillion JPY by 2035.

The first customer fulfilment centre (CFC) will be built in the Kanto region by 2023, with more to follow over the next two years. By 2025, Aeon expects to have a sales capacity in this region of over 200bn JPY.

As well as creating an online grocery offering for its customers, Aeon will also use Ocado’s store-pick software within parts of its existing store network, as well as offering customers click & collect. 

The deal will see Aeon pay Ocado upfront fees on announcement and during development. Further fees based on sales growth, installed capacity and service criteria will follow. 

"We see Ocado as a state-of-the-art, exciting and transformative partner aligned with our strategy of accelerating Aeon's Digital Shift to serve Japan's consumers,” said CEO of Aeon Motoya Okada.

“We will be able to give consumers the convenience and more importantly "time" to let them fulfil other more meaningful aspirations. We will forge stronger relationships with our customers by offering a more personalised service driven by the capabilities of the Ocado Smart Platform, coupled with Aeon's capabilities to curate an exciting and compelling product mix centered around serving the lifestyles of our consumers.”

Tim Steiner, CEO of Ocado added: “I am delighted to welcome another extraordinary retailer, and the first from Asia, to the unique international club of grocers powering their eCommerce operations with Ocado. This partnership marks a major milestone for the food retail landscape in Japan, and I am excited that Ocado will play a key role in bringing ever greater levels of convenience and choice to Aeon's customers."

Luke Jensen, CEO of Ocado Solutions, noted that Japan is one of the most “high tech economies” in the world: “It is also a unique and exciting market for grocery eCommerce, with sales primed for huge growth in the coming years,” he said.

The news comes a day after Ocado announced its first “mini CFC” in Bristol. The sixth CFC in the UK will have capacity for over 30,000 orders per weeks (compared to the 85,000 served by the regular-sized warehouses). The 150,000 sq ft mini CFC in Bristol is being built on an existing warehouse site in Purfleet and is expected to go live at the end of 2020 or early 2021. It is expected to provide 815 jobs in the local area.