LONDON (dpa-AFX) - Online supermarket Ocado Group plc (OCDO.L) and Japanese retailer Aeon have partnered to develop Aeon's online grocery business in Japan using the Ocado Smart Platform.
Aeon operates over 21,000 stores across various businesses, with operations in 14 countries.
Aeon will launch a new online business with Ocado Smart Platform, harnessing Ocado's customer fulfilment centres and end-to-end software applications to serve millions of customers across Japan.
The agreement aims to develop a national fulfilment network to serve the whole of the Japanese market, with expected sales capacity of around 600 billion yen by 2030, growing to about 1 trillion yen by 2035.
Ocado said it will invest in the Solutions business, and expects an additional 25 million pounds of operating costs in fiscal year 2020.
Initial customer fulfilment centres will serve the Kanto region, with the first planned to go live in 2023, to be followed by further customer fulfilment centre capacity over the following two years. By 2025, Aeon expects to have a sales capacity in this region in excess of 200 billion yen.
Aeon will pay Ocado certain upfront fees upon signing and during the development phase, then ongoing fees linked to both sales achieved and installed capacity within each CFC and service criteria.
Ocado will also provide Aeon with its end-to-end software platform as well as a comprehensive suite of engineering and support services to ensure smooth launch and ongoing development of its ecommerce operations.
Ocado expects that the transaction will have no financial impact in the current financial year. It also expects minimal additional capex in fiscal year 2020 with the majority of additional capex in the 18 months prior to the opening of customer fulfilment centres.
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