Kumar Rajagopalan: Architect of
retailers’ fightback against ecommerce companies
By Rasul Bailay, ET Bureau | Jul 22,
2016, 10.09 AM IST
NEW DELHI: Retailers Association of
India (RAI) till recently, was like any typical industry body, spending most
its energy on organising retail events and training programmes. But over the
past two years or so, led by its chief executive officer Kumar Rajagopalan, RAI
has changed its course altogether — it's now lobbying hard for the industry and
even taking the deep-pocketed ecommerce companies head-on.
The autumn of 2014 is seen by many
as a watershed moment in Indian retailing industry when ecommerce giants such
as Flipkart and Amazon, with billions of foreign money in their kitties,
offered deep discounts in their Diwali sales, not seen in the country before,
and within a matter of days they recorded hundreds of millions in sale. The
development stunned brick-and-mortar retailers as it affected their crucial festive
season sale, but it also brought together traditional retailers to fight
for ..
"Definitely ecommerce has been
a rallying point (for offline retailers) as we have been advocating for
creating a level-playing field for the industry," said J Suresh, CEO at
Arvind Lifestyle Brands. The fight between traditional retailers and ecommerce
companies also brought RAI CEO Rajagopalan — a trained chartered accountant — into the limelight.
A former Shoppers StopBSE 1.35 %
veteran and ex-IBM executive, Rajagopalan is considered by many as one of the
architects of brick-and-mortar's fight back against ecommerce. In that process,
Rajagopalan, along with other key members, converted the once sleepy RAI into
one of the most active lobby groups in the country, nudging the government to
ultimately come up with rules that barred e-commerce marketplaces from
influencing retail prices directly or indirectly. "Our issue has been for
a level playing field and it has never been offline vs online," said BS
Nagesh, former MD of Shoppers Stop. "
Several retail heads give
Rajagopalan credit for RAI's effectiveness. "He comes from the retail
industry, so he has a good understanding of retail and is using his knowledge
to build the last mile connect with the bureaucracy and with various
implementing agencies of the government," said Rakesh Biyani, director at
Future Group.
RAI
fired its first salvo against ecommerce in May last year when it filed a case
in the Delhi High Court, alleging online retailers of misappropriating their
foreign funding by deploying overseas capital in consumer retailing, which
India bars. Then, in September, footwear manufacturers and retailers in the
country filed a similar case in Delhi, alleging "rampant
illegalities" by ecommerce companies in "complete violation" of
FEMA and FDI rules.
Those two lawsuits ultimately
prompted the government to come up with a legislation on FDI in marketplaces.
Even as ecommerce companies themselves are majorly fragmented, they see RAI as
a strong lobby group and some of them term RAI as a brick and-mortar cartel.
The association lobbies with states
and played a role in the retail policies of some states that permit 365 days
opening of stores and allow farmers to bypass APMC mandis to sell directly to
retailers. "The most important thing is that we are supporting modernisation
of retail to help the industry to the next level of growth," Rajagopalan
said. "Biggest thing is to make the industry healthy as the sector is
still not profitable at a total level." Retailers are voting for
Rajagopalan's proposals .. "Kumar is somebody who understands
retail. He has been given full freedom to operate in RAI," said Nagesh of
Shoppers Stop.
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