International retailers find right fit in South Africa

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Zara, owned by the Spanish giant retailer, Inditex, is opening a new store in Cresta, Johannesburg. This move confirms ATKearney’s report last week on its 2014 Retail Development Index in Africa. While countries such as Ethiopia, Kenya and Rwanda are attracting more local retail development, South Africa is being sought out by international retailers.

Inditex is one of the biggest clothing retailers in the world. It employs 128 313 people and has about 6 340 stores globally, with four of those in South Africa. The fifth will open in Cresta soon.

In the report, South Africa was described as the most established retail market on the continent. It also has more consumer spending power, after retail sales increased by an average of 3 percent a year between 2005 and 2012.

In South Africa, modern retail stores account for more than 60 percent of sales, while in some countries elsewhere in Africa, they account for only 10 percent.

This is why a lot of international retailers are finding a home in South Africa. In the past two years, more than five international retailers have opened stores in the country. These include Australia’s Cotton On, UK-based Topshop, and American retailer Forever 21.

The report further states that South African consumers are price and brand conscious, which are the two the most important purchasing decision factors.

A retail expert previously said that, when these international brands arrived here, they often offered wrong sizes as well as heavy fabrics. Some had to rework their merchandise to find the correct South African body shape and size.

Despite these minor adjustment, international retailers are finding a good reception in South Africa – and more are expected to enter the market.

Malware

Companies across the Middle East and Africa have to realise that it is no longer a question of if they will be targeted by cyber attacks but when they will be invaded, Greg Griessel, a systems engineer for security at Cisco South Africa, warns.

Cybersecurity threats against systems, applications and personal networks have reached record levels, according to the Cisco 2014 Annual Security Report released yesterday. Cisco provides communications networking equipment.

Global threat alerts grew by 14 percent year on year from 2012 to 2013. The company added that globally, a sample of 30 of the world’s largest Fortune 500 companies generated visitor traffic from websites that hosted malware, short for malicious software. The global energy, oil and gas sector suffered a sharp rise in malware attacks.

Networks are becoming porous while information has to be safely managed if stored in the cloud. Collaboration with third-party vendors for specialised solutions may also provide a cyber risk. These are challenges facing chief information security officers, Griessel argues.

Why the Middle East and Africa is of particular interest is that it is a region where the growth in the adoption of smart devices is strong, from 133 million last year to 598 million expected by 2018.

Cloud computing traffic will grow from 17 exabytes recorded two years ago to 157 exabytes over the next three years, according to Cisco. An exabyte is 1 trillion megabytes.

Also fostering the environment for cyber attacks is the prevalence of mobility, which is the practice by individuals who access company networks off multiple mobile devices, no longer bound to personal computers in the office or home.

Cisco identifies the Android operating platform, which brands such as Samsung use, as susceptible to attacks. About 99 percent of malware for mobile devices are targeted at Android devices.

Java, a programming language, has also attracted web-delivered malware.

Industries that display a growing vulnerability to cyber attacks include energy, pharmaceutical, chemical, electronics manufacturing, agriculture and mining.

Edited by Peter DeIonno. With contributions from Nompumelelo Magwaza and Asha Speckman.


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