Scholarly interest in the informal economy has burgeoned in recent years, in anticipation of expanding our knowledge beyond the easily observable organizational life that takes place within the formal economic system. In line with this research endeavour, the present work represents a focused study of what I have labelled 'disguised relationships'. These ties result in repeated transactions between informal economy enterprises, which fail to comply with certain elements of the laws and regulations applying to their operations, and formal firms, which operate within the state-sanctioned formal economy. Drawing on an abductive reasoning process and grounded theory approach, I conduct a case study that captures the interactions between two leading cosmetics firms (i.e. formal firms) and ten daigou enterprises (i.e. informal enterprises) between 2013 and 2017. The examination of multiple data sources (i.e. interviews, news articles and social media observations) suggests that the organizational landscape under study differs considerably from the one in which formal firms are portrayed as rational choosers of best-performing partners or exploiters of subordinate actors within the informal economy. Rather, disguised relationships emerge in a unilateral and disguised fashion following the lead of informal enterprises, and formal firms unintentionally engage in the unexpected ties. Furthermore, disguised relationships create the image of dynamism replete with, metaphorically speaking, give-take, push-pull and chase-evade. More specifically, the emergent model illustrates the interactive practices through four mechanisms: (a) informal enterprises gaining social acceptability from certain society groups and acquiring the necessary resources from the members of identity-based groups; (b) drawing on this momentum, informal enterprises forming unilateral ties with formal firms in a disguised manner; (c) formal firms counteracting the unexpected ties, with temporary compromising on the counteracting efforts; and (d) informal enterprises avoiding the combatting efforts of formal firms through socially learnt tactics and leveraging network brokers (i.e. actors sharing the same ethnic/cultural backgrounds with informal enterprises while at the same time working for formal firms). This thesis makes contributions to the literature on both interorganizational relationships and the informal economy by overcoming the perennial problem of 'dualism' that is prevalent in the extant work. First, while the subject-object dualism bestows upon formal firms a heroic status such that they are conceptualized as rational actors forming interorganizational relationships, always on the basis of plans and goals, the current work argues that formal firms may participate in unexpected, yet lasting, ties, which requires ongoing situational responsiveness. Second, the structure-agency dualism projects the static image in which formal firms deliberately establish exploitative ties with structurally isolated informal enterprises, whereas the present study suggests that informal enterprises may exercise agency to proactively establish or dissolve connections with formal firms and to strengthen or weaken the relationships at their discretion. As such, dynamism figures prominently in the interorganizational relationships between formal firms and informal enterprises.

“Daigou” (代購), a term originally from mainland China, has become a robust industry and novel business model in China for a few years with the market expanding 19 times between 2008 and 2012. Due to government intervention and trust-related problems, Daigou market size has been in decline since 2014 with sales volume of only about 40 billion CNY in 2015 (as compared to 57 billion CNY in 2014). In order to fully understand what Daigou is and how it works, this paper focuses on the Chinese market. The Thesis not only investigates many aspects of the Daigou industry including its key elements, target products, customer groups, market potentials, development trends, and influences, but also sums up all information about the current Daigou market in China and to analyze how its future may be. As Daigou business grows from startup to maturity, different problems and opportunities arise, demanding different business solutions. The change of business models is necessary to suit today’s market needs because what worked a year ago might no longer be the best approach nowadays. The evolution of Daigou is presented by making use of five major business models to show how each business model changed to keep up with the market. The impacts of diverse factors on different business models and to the individuals, community and other businesses, are also covered with the use of literature review, personal interviews and qualitative research.