Gray Market for Information Technology (IT) Products: Status, Implications, and Strategies to Address the IT Gray Market Threat

Abstract

When genuine and branded Information Technology (IT) products flow through unauthorized channels, IT gray markets emerge. Gray markets for IT products represent a grave threat for many IT companies. Monetary losses in profits due to IT gray markets are estimated to be in the billions of dollars. Despite the importance of guidance in addressing the IT gray market threat, the paucity of IS research in gray markets is surprising. In this article, we discuss the IT gray market phenomenon, present the legal status of gray markets in several developed and developing nations, suggest some strategies to address the gray market problem, discuss implications, and call for future IS research in this important area.