A guide to illicit trade assessment
Illicit trade, otherwise known as the shadow economy, isn’t new news. The introduction of prohibition in 1920s America, for instance, saw the demand for illicit alcohol filled by Mafia bootleggers and ‘speakeasies’. Fast forward 100 years and the issues with illicit trade are magnifying and multiplying across markets and categories, creating a range of macro and microeconomic problems for governments, manufacturers, and players throughout the supply chain.
Broadly speaking, the illicit economy is defined as where transactions occur illegally. However, it is important to have a clear definition of what would be seen as illicit in your market, because definitions are not the same across the globe, or even across categories.
The scale of illicit trade and the shadow economy is vast and covers a multitude of product categories, including food, tobacco, alcohol, clothing, accessories, medications and more besides.
In this new paper, our Channel Performance Channel Sizing experts outline the main business challenges and questions around sizing and understanding illicit trade, as well as sharing best practice approaches and key research considerations, including:
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Why it’s important to size and understand illicit trade
Illicit trade poses several macro and micro level risks to economies, categories, and businesses – we highlight some of these risks and the potential impact. Ultimately, failure by governments to collect revenue impacts jobs and livelihoods, while threatening communities and society. -
How to approach sizing
When sizing illicit trade, the first step is being clear on how you want to use the results. Do you want to use it purely for internal purposes? Do you want to engage government bodies, law enforcement and courts? The media? Local authorities? With whom will the findings be shared? We outline some of the key questions you may want to ask. -
How to do the research
Throughout the process it is important to engage frequently with your stakeholders and to get their buy-in and alignment with the definition of illicit, as well as what is in – and out – of scope for the study. We examine how to ensure a ‘proper’ sizing of illicit trade channels, including the main considerations for your methodology.
We also share an ‘impact story’ to demonstrate the power of Ipsos’ Illicit Trade Assessment.
How Ipsos can help
At Ipsos we have significant experience in measuring and assessing illicit trade in multiple markets, including emerging economies, across various categories. We can assist in designing and implementing a methodology fit for your unique market characteristics and support you in putting the findings to work to shape your channel strategy, and work with your key stakeholders, including governments, industry association and communications teams.
Channel Sizing – of both licit and illicit trade – forms part of Ipsos’ Channel Performance offer concerned with: understanding channel context and opportunities, shopping behaviours and attitudes; and measuring purchase and service experience, activation and touchpoint execution, in order to drive sales conversion across all channels.
