Consumer-to-consumer product exchanges for original fashion brands in the sharing economy: Good or bad for fashion knockoffs?

It is widely considered that the popularity of consumer-to-consumer product exchange (C2C-PE) 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 argue that C2C-PE can encourage knockoff customers to purchase original products because of the additional product exchange value. To validate this argument, we construct analytical models to explore the impacts of C2C-PE on the members of the fashion supply chain and the consumers. By comparing between the cases with C2C-PE and without C2C-PE, 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. Managerial implications and future research agenda are discussed.