Understanding black market retailing: the case of Colombia’s San Andresitos

Abstract

PurposeThe purpose of this paper is to explore black market retailing, with a focus on Colombia’s San Andresitos.Design/methodology/approachThe authors use grounded theory methodology to develop a theoretical framework that explains how consumers rationalize their acceptance, rejection, or tolerance of black market retailing. The authors obtained qualitative data based on reader responses to newspaper articles on San Andresitos and used the responses as qualitative data in comparative analysis to derive a “strategy family” theoretical framework.FindingsThe framework advances rationalization techniques that consumers employ to accept, reject, or tolerate the San Andresitos.Research limitations/implicationsColombians are divided on the legality of the San Andresitos. Although half the informants note the wrongfulness of the San Andresitos, the other half offer reasons to accept or tolerate them.Practical implicationsLegitimate (i.e. lawful) retailers operating in Colombia, or planning to enter, need to realize that local and national government officials support the San Andresitos. Colombia’s legitimate retailers must co-exist with the black market and dissuade consumers from patronizing unauthorized vendors or purchasing illicit goods.Social implicationsColombia’s acceptance of its black markets results in consumers inadvertently supporting crime, terrorism, and even bodily harm via the San Andresitos. However, the San Andresitos enable lower-income consumers to gain access to otherwise unattainable merchandise and provide employment through lower-skilled labor.Originality/valueThis paper is one of the first to explore black markets. From a transformative service research perspective, this research reveals how consumers, retailers, and government officials participate in Colombia’s black market, and how their activities serve to harm consumer well-being.