Japan-based grocery retailer AEON has partnered with UK-based grocery retailer Ocado to launch an online grocery business.

Under this agreement, Aeon will leverage the Ocado Smart Platform (OSP) to develop the delivery business in Japan.

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Aeon will also make use of  Ocado’s proprietary customer fulfilment centres (CFCs) and end-to-end software applications.

Aeon is expected to deploy the technologies for its existing online supermarket business, store pick-up and click & collect.

The first CFC using OSP will be constructed in Japan by 2023.

Ocado solutions CEO Luke Jensen said: “Japan is one of the most-high tech economies in the world. It is also a unique and exciting market for grocery e-commerce, 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 e-commerce operations.”

Ocado will also provide Aeon with a comprehensive suite of engineering and support services.

Aeon will pay a certain amount as upfront fees to Ocado on signing the mutually exclusive partnership agreement in Japan and during the development phase.

It will also pay on-going fees depending on the sales achieved and ‘installed capacity within each CFC and service criteria.’