Aeon, the largest supermarket group in Japan and one of Asia’s biggest retailers, has joined forces with British online grocer Ocado to develop Aeon’s e-commerce capabilities.
The deal, which the companies announced in a statement at the end of last week, entails Aeon harnessing the Ocado Smart Platform (OSP) and other software, as well as Ocado’s distribution network expertise, to build up its own online grocery business covering the entire Japanese market.
Although online grocery shopping is still in its infancy in Japan, the market is growing and giant US retailers, such as Amazon and Walmart (via its Seiyu subsidiary), already have established operations.
With its partnership with Ocado, the first in Asia for the British firm, Aeon plans to build a national fulfilment network in the expectation of generating grocery sales of about ¥600bn ($5.48bn) by 2030, rising to approximately ¥1 trillion by 2035.
The first customer fulfilment centre (CFC) is scheduled to serve the Kanto region by 2023 with others to follow over the next two years.
In addition, Aeon will leverage Ocado’s store-pick software within parts of its existing store network, offer click-and-collect from selected sites, and make use of Ocado’s suite of engineering and support services.
Although both companies did not disclose financial terms, it is understood that Aeon will pay Ocado upfront fees during the development phase and then ongoing fees linked to sales performance and capacity installation at each CFC.
Commenting on what the initiative could mean for Japanese consumers, Aeon CEO Motoya Okada 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 personalised service driven by the capabilities of the Ocado Smart Platform, coupled with Aeon’s capabilities to curate an exciting and compelling product mix centred around serving the lifestyles of our consumers.”
Sourced from Aeon, Ocado; additional content by WARC staff