| Author: | Wang, Yingjia |
| Title: | Fashion knockoffs and counterfeiting problems in the fashion industry |
| Advisors: | Choi, Tsan-ming (SFT) Fan, Di (SFT) |
| Degree: | Ph.D. |
| Year: | 2022 |
| Subject: | Clothing trade Product counterfeiting Counterfeits and counterfeiting Hong Kong Polytechnic University -- Dissertations |
| Department: | School of Fashion and Textiles |
| Pages: | 146 pages : illustrations |
| Language: | English |
| Abstract: | Due to rapid development of efficient global logistics and thriving e-business operations, the phenomena of counterfeiting and copycat are getting more and more popular recently, especially in the fashion industry. Fashion knockoffs, which refer to the copycat behaviors of some brands in fashion apparel, are widely seen. It is commonly believed that the presence of fashion knockoffs harms the original-designer-label (ODL) product seller. However, real world observations show that some ODLs seem to be fine with fashion knockoffs and they co-exist. Moreover, facing the potential threats of fashion knockoffs, ODL product sellers tend to be risk sensitive (i.e., risk averse or risk seeking) rather than risk neutral. Although prior studies have explored the impacts of fashion knockoffs on the ODL product seller, they did not consider the common manufacturer scenario and risk attitude of the ODL product seller. Hence, in this thesis, we aim to fill the research gaps by incorporating these two factors to examine the impacts of fashion knockoffs on the ODL product supply chain and its agents. Fashion knockoffs also play a critical role in the context of consumer-to-consumer product exchange (C2C-PE) and logo design strategy of luxury fashion brands. It is widely considered that the popularity of C2CPE can reduce customer's demand for new products, which hurts original fashion brand's sales and profit. However, this perspective overlooks the impact of C2C-PE on the knockoff trading, a noticeable challenge the fashion brands is encountering. Taking a fresh perspective, we intend to explore the impacts of C2C-PE on the original product supply chain, its members and the consumers in the presence of fashion knockoffs. Lastly, we observe that different luxury brands use different logo design strategies, e.g., LV usually shows prominent logos in its products, while a blatant logo can hardly be found in a Hermès bag. Real world practices show that these luxury fashion brands (with big logo or no logo) have different vulnerabilities to fashion knockoffs and counterfeits. Hence, we aim to explore the impacts of fashion knockoffs and counterfeits on the logo design strategy of luxury fashion brands. Motivated by the popularity of fashion knockoffs and its potential impacts on the ODL product supply chain in the context of (i) a common manufacturer; (ii) C2C-PE; and (iii) logo design strategy, we build game theoretical models in this thesis to explore (i) impacts of fashion knockoffs on the ODL product supply chain and its agents considering a common manufacturer and risk attitude of the ODL product seller; (ii) impacts of C2C-PE on the original product supply chain, its members and the consumers in the presence of fashion knockoffs; and (iii) impacts of fashion knockoffs and counterfeits on the logo design strategy of a luxury fashion brand. By addressing the research objectives, we have obtained some important findings: First, we interestingly find that the presence of fashion knockoffs benefits the ODL product supply chain and its agents when the ODL product seller is risk averse and the ratio of demand uncertainty is relatively small, or the ODL product seller is risk seeking and the ratio of demand uncertainty is sufficiently large. The findings remain robust when we consider a non-standard markup wholesale pricing policy and different manufacturers' scenario. Moreover, we discover that when the ODL product seller is risk sensitive, a common manufacturer scenario is more likely to bring a win-win outcome to the manufacturer and the ODL product seller, which may explain why a common manufacturer producing for both an ODL and a knockoff product seller is widely observed in the fashion industry. Second, we theoretically find that the presence of C2C-PE benefits the original supply chain, its members and the consumers, while harms the knockoff supply chain, its members and the consumers. The findings are robust when considering: (i) strategic quality decision; (ii) price dependent C2C-PE utility and (iii) consumers' conspicuous behavior. In addition, we discover that in the presence of C2CPE, members of the original supply chain tend to produce a higher-price and superior-quality product, while members of the knockoff supply chain incline to sell a lower-price knockoff product. The original brand will encroach some of the knockoff brand's demand. Third, we uncover that when the negative effects differential caused by counterfeits and copycats is relatively small, showing a big logo is more beneficial to the luxury fashion supply chain, its members and the consumers; otherwise, showing no logo is more beneficial. The results remain robust when considering risk attitude of the luxury fashion brand and implementation of the blockchain technology. By comparing the optimal logo design strategies among different cases, we uncover that the big logo strategy is more prone to be optimal when implementing the blockchain technology. Moreover, when the luxury fashion brand is risk sensitive, whether the big logo strategy is more likely to be optimal depends on risk attitude of the luxury fashion brand and consumers' status disparity. Based on the analytical findings, we provide ODL product sellers with managerial implications regarding (i) strategies towards fashion knockoffs (i.e., whether to allow, ignore or deter the presence of fashion knockoffs); (ii) adoption of the C2C-PE scheme (e.g., how to increase the C2C-PE utility); and (iii) logo design strategy (i.e., whether to use big logo or no logo in luxury fashion products). Finally, future research directions are proposed. |
| Rights: | All rights reserved |
| Access: | open access |
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