Illegitimate trade in the fashion industry: relevance and counterstrategies in the Italian context

Abstract

Purpose From a supply chain perspective, counterfeiting is only part of a wider phenomenon defined as “illegitimate trade,” which includes supply chain infiltrations, factory overruns, gray and parallel markets, retail service counterfeiting and shoplifting. Although different forms of illegitimate trade can be observed, companies address them mainly through legal action, overlooking other counterstrategies such as technology adoption, supply chain integration and communication campaigns. This paper aims to understand which illegitimate trade phenomena are the most common and damaging to high-end fashion firms, identifying the counterstrategies that companies leverage the most and assessing the effectiveness of the counterstrategies. Design/methodology/approach A survey was conducted to address the above-mentioned research goals. It was targeted at Italian high-end fashion companies and 112 usable questionnaires were collected. Findings Empirical evidence shows that the most common illegitimate trade events are pure counterfeiting and parallel/gray markets. Various forms of illegitimate trade can co-exist and are correlated, but each of them calls for a targeted bundle of countering strategies. A synergic relationship among strategies is also observed. Originality/value This paper addresses the issue of counterfeiting and illegitimate trade with a holistic approach, highlighting the necessity of an interfunctional approach within the company as a condition for effectively countering these problems.