[Edaily Reporter SHIN MIN JOON ] “Wheee-ing, clang, wheee-ing, clang.”
On the 7th, I visited the Lotte Mart Zeta Smart Center in Busan. As I opened the thick steel door and stepped into the frozen food storage area, the frigid air at minus 25 degrees Celsius enveloped my entire body. Inside the storage area, over 100 AI picking robots, dubbed “Bots,” moved ceaselessly along a checkerboard-patterned grid of rails, much like a giant claw machine.
Despite moving at a very fast speed of 4 meters per second, the bots maneuvered with great precision without colliding with one another.
The bots swiftly transported baskets containing numerous items ordered by customers to the location of the OGRP (On-Grid Robotic Pick) picking robot arm, situated at the top of the grid rails.
The OGRP used its long, monkey-like arms to precisely grasp the items from the baskets brought by the robots, package them, and transfer them to baskets designated for each customer. These baskets then slid down a chute to the shipping area at the very bottom of the grid rails. The entire process, from the initial picking of items to their arrival at the shipping area, took only about 30 minutes.
Jeong Jae-woo, Head of Lotte Mart’s Online Business Division, emphasized, “At the Zeta Smart Center in Busan, it takes about one hour from the initial picking of items to loading the entire shipment onto delivery trucks,” adding, “This is the fastest among online logistics centers operated by major domestic supermarkets.”
The Customer Fulfillment Center (CFC)—a future growth engine for which Lotte Group Chairman Shin Dong-bin had announced a total investment of 1 trillion won—has finally been unveiled. On the 7th, Lotte Group officially launched its first Customer Fulfillment Center, the “Lotte Mart Zeta Smart Center Busan,” at the International Industrial Logistics City in Gangseo-gu, Busan. The Customer Fulfillment Center is an online-exclusive logistics center that integrates the entire process—from receiving online orders to inventory management, product picking and packing, and dispatch and delivery scheduling.
Lotte Mart built the Zeta Smart Center Busan in collaboration with the British retail tech company Ocado in November 2022. With an investment of approximately 200 billion won, construction on the Zeta Smart Center Busan began in December 2023 and was completed last August. Chairman Shin personally oversaw both the signing ceremony with Ocado and the groundbreaking ceremony for the Zeta Smart Center Busan. As such, the Zeta Smart Center Busan is regarded as a key project symbolizing the digital transformation of Lotte Group’s retail operations, going beyond that of a mere logistics facility.
Lotte Group decided to build a customer fulfillment center because it judged that the online penetration rate for food—which remains lower than that of other product categories—offers significant growth potential. According to Statistics Korea, the online penetration rate for food (the ratio of online sales to total retail sales) stands at 28%, which is lower than that of other product categories such as cosmetics (41%), furniture (50%), and home appliances (55%). This is attributed to fundamental limitations such as maintaining freshness, as well as issues like incorrect deliveries and delivery delays.
Director Jeong Jae-woo stated, “The Zeta Smart Center Busan aims to overcome these limitations through technology,” adding, “By combining Lotte Mart’s competitiveness in fresh foods with Ocado’s AI and automated logistics technology, we will integrate and control the entire process—from order placement to picking, packing, and shipping.” He added, “The Zeta Smart Center Busan is a comprehensive hub of cutting-edge distribution technologies—including AI, big data, and machine learning—operating alongside up to 1,000 robots.”
In particular, the Zeta Smart Center Busan focuses on significantly enhancing shopping convenience by addressing chronic issues that consumers have faced with traditional online grocery shopping, such as △product spoilage, △out-of-stock items or unauthorized substitutions, and △delivery delays. Significant effort was devoted to ensuring customers could most clearly feel the difference in the delivery experience. In fact, the Zeta Smart Center Busan has increased the number of daily delivery slots from the previous average of three to a maximum of 13 for the 4 million households in Busan and the Yeongnam region.
Director Jeong said, “Customers using the Zeta Smart Center Busan can specify delivery times in 2- to 3-hour intervals from early morning to evening,” adding, “We’ve also expanded the range of products we offer to 35,000 items, broadening customer choice.” This is 1.3 times the scale of competitors.
The Zeta Smart Center Busan is viewed as a test case that will determine the success or failure of Lotte Group’s online grocery business, one of its key growth engines for the future. The center aims to process up to 33,000 orders per day. This is because, given the high fixed costs associated with customer fulfillment centers, actual order volume is the key determinant of success. If order volume does not meet expectations, it could actually reduce profitability. Lotte Mart aims to reach the break-even point (BEP) within six years.
Director Jeong emphasized, “Although the Zeta Smart Center Busan currently handles fewer than 10,000 orders per day, we will ensure we achieve our target through future promotions and the expansion of our product lineup.”
