The Japanese grocery chain Aeon, one of the biggest online supermarket retailers in the continent, has signed a deal with British retailer Ocado to develop its online eCommerce enterprise and expand into the logistics of delivering groceries to customers. Marking Ocado’s first partnership with an Asian company, the deal will see the pair collaborating predominantly in an online capacity that will also make use of Ocado’s wealth of warehouses and storage facilities. It’s not the only retailer who uses Ocado’s in-house software to manage the logistical challenges of eCommerce delivery to customers – chains in both the United States and Europe have formed partnerships with Ocado, including the UK’s very own Morrisons, who expanded into online shopping in 2014. The Ocado Smart Platform, which is the system used to aid retail eCommerce delivery and is used across the world, is becoming an increasingly popular choice with supermarkets just getting into the competitive home delivery sector of grocery retail.
As a part of this new deal, Ocado will help to develop and build warehouses in the Kanto region of Japan – which includes the capital city, Tokyo – and expects them to be fully operational by approximately 2023. Looking further into the long term, the pair are hoping that they can create a larger eCommerce network that connects individuals involved in grocery delivery, generating annual sales of 1 trillion yen by 2035. Aeon will pay Ocado both an upfront cost as well as ongoing fees throughout the development of the network as it expands into the next couple of years. To its own customers – and investors – Ocado has stated that they don’t expect to see a huge financial impact for the rest of 2019, but that operating costs will increase in 2020 by around $25m due to planned infrastructure investment.
The new partnership has been welcomed by both members of each company and figures within the retail industry, with many noting that this has placed Ocado in a unique position within the UK supermarket sector, which is an increasingly competitive marketplace. Aeon currently operates around 21,000 stores in 14 countries and is one of the top ten biggest retailers in the world. Meanwhile, in the UK, Ocado is best known for its partnership with Waitrose, which is due to end in 2020 and will join forces with Marks and Spencer to offer home delivery on grocery items from both Ocado and its partnered retailer.