LONDON, Nov. 29, 2019 /PRNewswire/ -- We are pleased
to announce the signing of an agreement between Ocado Solutions
("Ocado") and Aeon to partner to develop Aeon's online grocery
business in Japan using the Ocado
Smart Platform ("OSP").
Aeon is one of Japan's
longest-established retailers with almost a century of experience
serving Japanese customers. It is also one of Asia's largest retailers, with over 580,000
associates and approximately 100m
customers. Aeon operates over 21,000 stores across various
businesses, with operations in 14 countries.
Aeon will launch a new online business with OSP, harnessing
Ocado's unique, proprietary customer fulfilment centres ("CFCs")
and end-to-end software applications to serve millions of customers
across Japan.
The agreement plans for the development of a national fulfilment
network to serve the whole of the Japanese market, with expected
sales capacity of around 600bn JPY by
2030, growing to approximately 1tn JPY by 2035.
Initial CFCs will serve the Kanto region, with the first planned
to go live in 2023, to be followed by further CFC capacity over the
following two years. By 2025, Aeon expects to have a sales capacity
in this region in excess of 200bn
JPY.
Aeon is expected to commit to further CFC capacity in the period
following its first CFC going live. This capacity will be served
via a configuration of different sizes of facility, enabling Aeon
to serve a wide range of customer shopping missions flexibly as the
Japanese grocery ecommerce market continues to develop. In
addition, Aeon will leverage Ocado's proprietary store-pick
software within parts of their existing store network, and
offer click-and-collect from selected sites.
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.
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.
This agreement is mutually exclusive in Japan on the basis of Aeon, in the longer
term, meeting market share targets or ordering an agreed amount of
CFC capacity per annum.
Motoya Okada, CEO of Aeon
said:
"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.
"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 personalized 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.
"We will actively partner with Ocado to create a smooth,
seamless digital experience thereby speeding up our efforts to
reform the online customer experience."
Tim Steiner, CEO of Ocado Group
said:
"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, said:
"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."
"Aeon is a giant of Japanese retail with a long-standing
commitment to delivering outstanding grocery experiences to its
customers. I am delighted that they have chosen the Ocado Smart
Platform to build on this commitment, bringing cutting-edge
innovation and the learnings from a global network of world-class
retailers to their ecommerce operations."
Expected financial impact for Ocado
As Ocado continues to sign more partnerships worldwide, the
company remains resolutely focused on execution. Ocado will invest
in the Solutions business and expects to scale the resources and
infrastructure required to serve our current and future partners
successfully. Ocado expects an additional £25m of operating costs
in FY20, given the extra support costs for Solutions generally and
the specific early costs of implementation for Aeon.
The transaction will have no financial impact in the current
financial year, given that it comes right at year-end. Ocado
expects minimal additional capex in FY20 with the majority of
additional capex in the 18 months prior to the opening of CFCs.
There will be a conference call for analysts held at
7.30am GMT.
Dial in details: +44 3333000804 (toll) or 08003589473 (toll
free) Pin Code: 47649537#
A replay will be made available shortly afterwards on the
website.
Notes to editors
About Ocado
Ocado is a UK based company admitted to trading on the London
Stock Exchange (Ticker OCDO). It comprises one of the world's
largest dedicated online grocery retailers, operating its own
grocery and general merchandise retail businesses under Ocado.com
and other specialist shop banners, together with its Solutions
division. In February 2019, Ocado
Group announced the creation of an online grocery retail joint
venture with Marks & Spencer plc, one of the UK's leading food
and clothing retailers.
About Ocado Solutions
Ocado Solutions is responsible for Ocado's corporate
partnerships, providing the Ocado Smart Platform as a service to
retailers around the world. OSP comprises access to Ocado's
physical infrastructure solutions, running highly efficient
warehouse operations for the single pick of products, together with
the entire end-to-end proprietary software applications required to
operate a world class online grocery business. It is underpinned by
Ocado's proven expertise and experience as a dedicated online
grocer in the UK.
Ocado Solutions is partnered with leading grocery retailers
worldwide, including Kroger, Sobeys, Morrisons, Groupe Casino,
Coles Supermarkets, ICA Group, Bon Preu Group, and Ocado
Retail.
About Aeon
Aeon is the largest retail conglomerate in Japan and has earned the highest operating
revenue in Japan's retail industry
for seven consecutive years. Aeon operates in 14 different
countries with major activity in Japan across various businesses and services
such as hypermarkets, supermarkets, drugstores, and financial
services.
Cautionary statement
Certain statements made in this announcement are
forward-looking statements. Such statements are based on current
expectations and assumptions and are subject to a number of risks
and uncertainties that could cause actual events or results to
differ materially from any expected future events or results
expressed or implied in these forward-looking statements. Persons
receiving this announcement should not place undue reliance on
forward-looking statements. Unless otherwise required by applicable
law, regulation or accounting standard, Ocado does not undertake to
update or revise any forward-looking statements, whether as a
result of new information
Person responsible for arranging the release of this
announcement:
Neill
Abrams
Group General Counsel & Company Secretary
Ocado Group plc
Buildings One & Two Trident Place
Mosquito Way
Hatfield
Hertfordshire
AL10 9UL
Fax: +44(0)1707-227997
email: company.secretary@ocado.com
Ocado Group plc LEI: 213800LO8F61YB8MBC74
Contacts
OCADO
- Tim Steiner, Chief Executive
Officer - Ocado Group, on 01707-228-000
- Luke Jensen, Chief Executive
Officer - Ocado Solutions, on 01707-228-000
- Duncan Tatton-Brown, Chief
Financial Officer, on 01707-228-000
- David Shriver, Director of
Communications, on 01707-228-000
- Martin Robinson, Tulchan
Communications on 020-7353-4200
AEON
- Motoya Okada, President and
Group CEO, on +81-43-212-6061
- Akio Yoshida, Executive Vice
President and Representative Executive Officer, Developer Business
and Digital Business, on +81-43-212-6061
- Kaori Miyake, Executive Officer
CSR & Communication, on +81-43-212-6061
- Kikuko Fujita, General Manager
Corporate Communications Department, on +81-43-212-6061
- Sadayuki Kurimoto, Manager
Public Relations Group Corporate Communications Department, on
+81-43-212-6061