Retail news. Semester 1 of 2014 table of contents

Consumer spending online rises 30% to R2,6bn [bizcommunity 9 Jan 2012].

By: Annaleigh Vallie. 9 Jan 2012 11

South Africans spent about R2,6bn online last year, 30% more than in 2010, research from World Wide Worx shows. "The final numbers are not yet in and this figure could grow to almost 40%," World Wide Worx MD Arthur Goldstuck said late last week. "There were a few key ingredients that the growth can be attributed to."

"Firstly, there has been significant growth in internet users that have been online for more than five years." These people are just waiting to be persuaded to spend their money online, he said.

"Secondly, websites are far more user-friendly now with more payment options. More and more evidence shows people are using retail websites to make purchasing decisions and to do research, which has meant the websites have become an integral tool."

According to a World Wide Worx research report, entitled Online Retail in SA 2011, the total retail market in SA was worth R561bn in 2010 with online retail accounting for R2bn or 0.36%.

This is up almost threefold from 0.13% of total retail sales in 2004, but remains a small part of the overall pie. As online retail sales grow, however, there is clearly much potential to realise in this market, Mr Goldstuck said.

This has been the case for latecomer to the market for luxury goods Forevermark - a diamond brand of jewellery produced by De Beers. The brand introduced in 2008 has found its online presence has helped people to learn more about the brand and driven sales in the East, Forevermark CEO Stephen Lussier said.

Local high-end retailer Woolworths said the number of customers and sales have grown each year. "Improved connectivity and online user experience has been the key to driving e-commerce activity. Many Woolworths customers are transacting on our site from work, possibly for convenience. The range of products available online will continue to grow, as will the delivery coverage area," the company said.

In the US, world's largest ecommerce market, online retail was about US$165bn in 2010.

Even as traditional retail sales fell in 2009 in response to the worldwide recession, global online retail sales grew 14.5% in 2009 to $348,6bn. The biggest contributor was electronics, making up about 22.6% of the market, the research report says.

According to the report, in terms of proportion of all global retail, online retail sales accounted for only 2.5% of the total. For the top 100 retailers worldwide, online retail accounted for 6.6% of sales. By 2014, global online retail is expected to reach $778,6bn, increasing at 22.2% a year.

Clothing retailers agree to fund factory improvements in Bangladesh.

H&M, Zara chain owner Inditex among major retailers to sign safety deal. The Associated Press. Posted: May 13, 2013 5:35 PM ET

 

Swedish-owned H&M is the world's second-biggest clothes retailer and is known for its low-priced fashions. It was one of several large clothing retailers that agreed to fund safety improvements at Bangladeshi garment factories.

Some of the biggest Western clothing retailers embraced a plan that would require them to help pay for factory improvements in Bangladesh as the nearly three-week search for victims of the worst garment-industry disaster in history ended Monday with the death toll at 1,127.

Bangladesh's government also agreed to allow garment workers to form unions without permission from factory owners. That decision came a day after it announced a plan to raise the minimum wage in the industry.

The collapse of the eight-storey Rana Plaza factory building April 24 focused worldwide attention on hazardous conditions in Bangladesh's garment industry, where workers sew low-cost clothing that ends up on store shelves around the globe, including the U.S. and Western Europe.

It came months after a fire at another garment factory in Bangladesh in November killed 112 workers.

Swedish retailing giant H&M, the largest purchaser of garments from Bangladesh; Britain's Primark Stores and Tesco; C&A of the Netherlands; and Spain-based multinational Inditex, owner of the Zara chain, said they would sign a contract that requires them to conduct independent safety inspections, make reports on factory conditions public and cover the costs of fire and building safety repairs and improvements.

It also requires them to stop doing business with any factory that refuses to make necessary safety improvements.

Two other companies agreed to sign last year: PVH, which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod labels, and German retailer Tchibo. Others have refused to sign, complaining that the plan would be legally binding and costly.

A 'pragmatic step' for retailers: H&M

"This agreement is exactly what is needed to finally bring an end to the epidemic of fire and building disasters that have taken so many lives in the garment industry in Bangladesh," said Scott Nova, executive director of the Worker Rights Consortium, a worker rights group that had been one of the organizations pushing for the agreement.

H&M said the agreement is a "pragmatic step," and urged more brands to reach a pact that covers the entire industry of 5,000 garment factories in Bangladesh.

"Our strong presence in Bangladesh gives us the opportunity to contribute to the improvement of the lives of hundreds of thousands of people and contribute to the community's development," H&M spokeswoman Helena Hermersson said. "We can slowly but surely contribute to lasting changes."

Primark is one of the few retailers that have acknowledged that their clothes were being made in the Rana Plaza building at the time of the collapse. The building housed five clothing factories.

Minimum wages among lowest in world

Mohammed Amir Hossain Mazumder, deputy director of fire service and civil defence, said the search for bodies at Rana Plaza was called off Monday evening. The last body was found on Sunday night.

The Rana Plaza owner and eight other people, including garment factory owners, have been detained in the investigation. Authorities say the building owner added floors to the structure illegally and allowed the factories to install heavy equipment that the building was not designed to support.

Working conditions in the $20-billion US industry are grim, a result of government corruption, desperation for jobs, and industry indifference. Minimum wages for garment workers are among the lowest in the world at 3,000 takas ($38 US) a month.

Bangladesh's cabinet approved an amendment to the 2006 Labour Act on Monday lifting restrictions on forming unions in most industries, government spokesman Mosharraf Hossain Bhuiyan said. The old law required workers to obtain permission before they could unionize.

"No such permission from owners is now needed," Bhuiyan told reporters after the Cabinet meeting presided over by Prime Minister Sheikh Hasina. "The government is doing it for the welfare of the workers."

Union organizers harassed

Union leaders responded cautiously.

"The issue is not really about making a new law or amending the old one," said Kalpana Akter of the Bangladesh Centre for Workers Solidarity, a group campaigning for garment workers' rights. "In the past, whenever workers tried to form associations, they were subjected to beatings and harassment. The owners did not hesitate to fire such workers."

Bangladesh's government has in recent years cracked down on unions attempting to organize garment workers. In 2010 Hasina's government launched an Industrial Police force to crush street protests by thousands of workers demanding better pay and working conditions.

On Monday, nearly 100 garment factories shut down in the Ashulia industrial area near Dhaka after protests erupted over the death of a worker, Parul Akter, 22, whose body was found Friday inside a garment factory. A local police official, Badrul Alam, said she committed suicide.

Thousands of workers took to the streets and vandalized vehicles and shops before police used sticks to disperse the protesters. Several people were injured, said a police official who spoke on condition of anonymity because he was not authorized to speak publicly.

Wage board to oversee pay raises

Bangladesh has 3.6 million garment workers. It is the third-biggest exporter of clothes in the world, after China and Italy.

On Sunday, the Bangladesh government set up a new minimum wage board that will issue recommendations for pay raises within three months. The Cabinet will then decide whether to accept those proposals.

The wage board will include representatives of factory owners, workers and the government.

Government officials also have promised improvements in safety.

Since 2005, at least 1,800 garment workers have been killed in factory fires and building collapses in Bangladesh, according to the advocacy group International Labor Rights Forum.

In the blaze last November in Dhaka, the factory lacked emergency exits, and its owner said only three floors of the eight-story building were legally built.