Inside Lotte's Zeta Smart Center Busan: Robots, AI and a deep freeze built for online grocery

Bots carry totes (storage boxes) along the upper grid of the "hive" storage system inside Lotte Mart's Zeta Smart Center Busan in Gangseo-gu, Busan, on Friday. The bots move totes toward the machine-learning-based robotic arm OGRP, which sorts items according to customer orders into delivery totes. [Lotte Mart & Super]

Temperatures outside hit a high of 36 degrees Celsius in Gangseo-gu, Busan, on Friday — but inside Lotte Mart's Zeta Smart Center Busan, it felt like the dead of winter. The refrigerated zone was kept between 1 and 5 degrees, while the frozen zone held steady at minus 25 degrees. Stepping closer to the "Auto Freezer" section, where frozen products are stored, the cold became even more biting.

At the top of the "hive" — the facility's product storage grid — rectangular wheeled bots darted back and forth like worker bees, ferrying totes filled with groceries without pause. 3D-printed and nimble, the bots zipped across a latticed rail system spanning a space larger than a soccer field at 4 meters per second. Their destination: the vicinity of OGRP, a robotic arm powered by machine learning that picks items from customer orders and transfers them into delivery totes.

About 120 bots were operating in the refrigerated hive section that day, though the system can run up to 300. The same "hive and bot" setup also runs inside the Auto Freezer, where conditions make prolonged human work impractical. The Auto Freezer can handle more than 4,000 frozen products — more than double the capacity of a typical hypermarket floor — and the center can carry up to 10,000 refrigerated and frozen products combined, excluding ambient-temperature goods.

Totes loaded with delivery items wait in a 5-degree dispatch area before being loaded onto delivery vehicles in sequence. Those vehicles are also equipped with refrigeration and freezing units. Cha Woo-chul, chief executive of Lotte Mart & Super, speaking at an opening press conference held at the center that day, said the facility would "deliver fresh food to customers in perfect condition and on time using a complete cold system from start to finish," adding that customers would "experience a complete cold chain unlike anything seen at any other logistics center."

An exterior view of the Zeta Smart Center Busan in Gangseo-gu, Busan. [Lotte Mart & Super]

Built with Ocado: robots and AI converge in a cutting-edge logistics center

The Zeta Smart Center Busan is an online-only fulfillment center built as a joint venture between Lotte Mart and British retail-technology company Ocado. With a total floor area of 40,000 square meters, it can handle up to 35,000 products and is the largest grocery fulfillment center in South Korea. The center operates with a staff of just over 200 — roughly half the headcount of comparable online fulfillment centers run by competitors.

That lean operation is made possible by Ocado's advanced logistics automation technology, which deploys up to 1,000 robots alongside AI and big data. The center is the first in South Korea to adopt the Ocado Smart Platform (OSP), which controls every step of the online grocery process from order placement to delivery. It took three years and seven months from the partnership agreement the two companies signed in November 2022 to reach full commercial operation. Site acquisition, construction and related investment totaled approximately 200 billion won ($141 million). Ocado currently has partnerships with 14 major retailers in 11 countries, including Kroger in the United States and Aeon in Japan.

Nick de la Vega, Ocado's chief revenue officer, said it was meaningful to introduce "Ocado's most advanced customer fulfillment center in South Korea, one of the world's top online grocery markets," adding that he was pleased to be "raising the bar for the online shopping service and experience customers expect, together with Lotte Mart."

Lotte Shopping and British firm Ocado sign their partnership agreement in November 2022. [Lotte Shopping]

100% cold chain, AI-optimized delivery routes — 'a fresh revolution begins'

According to Statistics Korea, the value of online grocery transactions in South Korea grew from about 17.17 trillion won in 2019 to about 52.3 trillion won in 2025, an average annual growth rate of 20.4 percent. Online transactions in fresh produce, meat and seafood grew even faster, at an average of 25.5 percent a year. Yet food's share of total online retail remains a relatively low 28 percent, compared with 55 percent for electronics, 50 percent for furniture and 41 percent for cosmetics. Spoilage, misdirected deliveries and delays are cited as the main barriers.

Lotte Mart plans to clear those barriers with a 100 percent cold chain and a differentiated delivery system. The center maintains freshness from the moment products arrive to the moment they are delivered. Incoming products move through five steps: a decant station for inspection, the hive storage grid or the Auto Freezer for frozen items, worker picking for non-standard or heavy items, final packing, and sorting by delivery zone. Every stage is divided into ambient, refrigerated and frozen sections, each held at its optimal temperature.

The hive, the center's core zone, runs between 8 and 21 tiers depending on the section. Unlike a mezzanine structure with intermediate floors, it uses a fully independent floor-by-floor design. The OSP algorithm uses machine learning to forecast demand by factoring in variables such as season and weather, and bots continuously reposition products within the grid. High-priority outbound items are placed at the top for first-in, first-out retrieval.

Deliveries run around the clock in two-hour windows, with up to 13 slots per day. An AI dispatch algorithm analyzes real-time road conditions to plot the most efficient routes for on-time delivery even in complex traffic. The delivery zone covers 4 million households across Busan and the broader Yeongnam region. Busan, Changwon and Gimhae will be served directly from the center at launch, with plans to expand next year to nearby major cities including Daegu and Ulsan through satellite "spoke" delivery hubs.

At full capacity, the center can process up to 33,000 orders a day, equivalent to annual sales of 960 billion won. Lotte Mart plans to spend about a month stabilizing operations before pushing to maximize the center's utilization rate within five years. The company expects to reach breakeven in 2032, its sixth year of operation.

Jeong Jae-woo, head of Lotte Mart's online business division, said the company believed that pairing Ocado's technology with "more than 30 years of expertise and know-how running marts and supermarkets" would generate meaningful synergies. "Lotte will launch a fresh revolution in online grocery shopping, starting from Busan," he said.

Bots move totes inside the Auto Freezer, which stores frozen products at minus 25 degrees Celsius. [Lotte Mart & Super]

'A model for sustainable, future-ready logistics'

The Zeta Smart Center Busan incorporates a fire-suppression system designed with safety as the top priority. The facility is equipped with early suppression fast-response (ESFR) sprinklers with more than four times the water discharge capacity of a standard logistics center, and has secured 1,000 tons of firefighting water on site. Totes made from zinc-alloy steel sheets are arranged along the outer perimeter of the hive to contain the spread of fire. Fire-department access panels have also been installed to allow firefighters to spray water directly from outside the building in the event of a fire.

The outdoor parking area hosts a solar power installation with a capacity of 1,900 kilowatts per hour. Annual electricity output is approximately 2,400 megawatt-hours, covering about 15 percent of the center's total power consumption and cutting carbon dioxide emissions by more than 1,000 tons a year.

The center also plans to hire about 2,000 local workers for operations and delivery roles. It has established a co-prosperity model aimed at helping small merchants expand their reach by identifying promising local businesses and broadening sourcing of locally made products. CEO Cha said the company would make the center "a model sustainable, future-ready logistics facility trusted by customers in Busan and the Yeongnam region — built not only on world-class robotic automation technology, but also on eco-friendly management, safety and local job creation."

soho0902@heraldcorp.com