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A major cyberattack crippled Ascol, a vital Japanese e-commerce platform, disrupting supply chains and impacting medical institutions. Discover the wider economic fallout and why this could happen to anyone. #Cyberattack #Japan #Ecommerce #Ransomware #CyberSecurity
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0:00
Now hackers have unleashed chaos at some
0:03
major Japanese companies in recent
0:05
months and ransomware attack on Asahi
0:07
breweries disrupted both production and
0:10
sales. Managers are still cleaning up
0:12
the mess two months later. And the
0:15
latest firm under digital siege is
0:18
e-commerce platform Ascll. Now this case
0:21
could have wider consequences for
0:23
Japan's economy. It's now been one month
0:26
since Ascll's cyber defenses were
0:28
breached and operations have still not
0:31
fully recovered. The firm this week
0:33
allowed the media to see some of the
0:35
disruption caused at its logistics
0:37
center in Yokohama near Tokyo. This is
0:39
where products are stored and shipped.
0:42
The online system serving medical
0:44
institutions remains out of action.
0:47
Employees are confirming orders on paper
0:50
and sticking shipping labels by hand. a
0:53
serious downgrade of what is normally an
0:56
automated operation. The company plans
0:58
to resume full operations to its
1:00
corporate customers in the first half of
1:03
December. So, what is ASCL's business
1:06
exactly? I talked to Kazahaya Takahiro,
1:08
a UBS securities analyst who has been
1:11
following the company for more than a
1:13
decade. He says is a B-2B company used
1:16
by firms across Japan, big and small.
1:25
ASCL is one of the largest office supply
1:28
companies in Japan. For example, if you
1:30
check the number of companies registered
1:32
on ASCL's e-commerce site, the figure is
1:35
4.69 million firms. ASCL provides
1:38
customers with copier paper and other
1:40
stationary and the company also supplies
1:43
medical equipment online. Overall, I
1:47
think you can describe ASCL as a company
1:49
that supports daily business operations
1:51
for Japanese companies.
1:55
So, here's what we know about the ASCL
1:57
cyber attack. ASCL raised alarm on
2:00
October 19th, announcing system failures
2:03
that forced it to halt operations. The
2:06
company said the problems were focused
2:07
on logistics, but the damage wasn't
2:10
confined to the targeted company. Major
2:12
retail brand Muji also suspended online
2:15
sales in Japan about the same time. Muji
2:18
outsources some of its deliveries to a
2:20
subsidiary of Ascll. Now we learn more
2:23
at the end of last month. A security
2:26
expert told NHK that a hacker group
2:28
called Ransom House had claimed
2:31
responsibility. The source said the
2:32
group posted a statement on the dark web
2:35
claiming it had obtained more than one
2:37
terabyte of data which appears to
2:39
include client information. Kazahaya has
2:43
been calculating the financial impact on
2:45
Ascll. The numbers are not small.
2:52
We had estimated ASCL's operating profit
2:54
for this financial year at about $70
2:56
million. We now forecast they are losing
2:59
about $880,000 a day with operations
3:03
halted for a month. That's $25 million
3:06
in loss profit. Subtract that from our
3:09
forecast and there's only about $45
3:11
million in annual profit.
3:14
And the damage will not be limited to
3:16
the hijacked company.
3:21
We are now gradually seeing the wider
3:22
impact of ASCL's operational shutdown.
3:25
For example, during the COVID pandemic,
3:27
the company tied up with the health
3:29
ministry and provided companies with
3:31
things like much needed protective gear,
3:34
masks, and disinfectants.
3:36
So now, small and medium-sized medical
3:39
institutions are struggling as they
3:41
cannot get the medical supplies they
3:43
need on a daily basis.
3:46
In the past, victims of cyber attacks in
3:48
Japan have been criticized for lacks
3:50
security. But according to Kazahaya,
3:53
Ascal was well aware of the risks.
3:59
The firm's main business is e-commerce
4:01
where it operates online. So cyber
4:03
security was one of the top priorities
4:06
for management. The executives see it as
4:08
one of the highest risk factors for the
4:10
company and the company had been taking
4:13
various measures to prevent cyber
4:15
attacks. So I think the view we should
4:17
take is that this incident occurred not
4:19
because it was ascllal but it just
4:22
happened to be the target among many
4:23
other companies.
4:30
Kazahaya says the technology
4:31
capabilities of hackers are advancing
4:34
rapidly and it's becoming harder to
4:36
defend against their attacks, especially
4:38
for one company acting on their own.
4:41
That means everyone, including the
4:43
government, needs to get involved in
4:45
cyber security. After all, the victims
4:47
are no longer just companies, their
4:50
economies.
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