Towards effective online review systems in the Chinese context: A cross-cultural empirical study
Introduction
Nowadays, more and more people in China choose to shop in online stores rather than in traditional ones. According to the report by China Internet Network Information Center (CNNIC) (2012), the number of online shoppers in China has reached 194 million by the end of 2011. The proportion of online shoppers in total Internet users increased from 35.2% to 37.8% in the same period with a steady growth every year. These numbers demonstrate that the Chinese e-commerce industry has shown great potential through its fast development.
With the advent of web 2.0, users have been particularly productive in providing opinions (i.e., online reviews) of virtually every product ranging from televisions, cars, hotels, restaurants, books and movies to mobile apps (Dellarocas 2003). These online reviews, compared with those provided by merchandisers themselves, convey more consumer-oriented product information about purchase and usage experiences (Lee et al. 2008), On the other hand, it has long been recognized that these reviews are of great use to prospective users of these products (Lee et al. 2008), leading to substantial efforts being devoted to harnessing them. Resnick and Zeckhauser (2002) point out that consumers’ online reviews have a direct impact on transactions. Chevalier and Mayzlin (2006) demonstrate that online reviews have a significant influence on book sales on Amazon US (www.amazon.com, the largest e-commerce website in the United States). Online merchandisers also have begun to embed consumers’ online reviews in product advertisements in the form of complement to product introduction (Lee et al. 2011).
Due to the significance of online reviews, it is critical to design an effective online review system, where all the activities (i.e., review contribution and review harness) happen. In this paper, we aim to shed some light on how to develop effective online review systems in the Chinese context. It has been recently recognized that the effectiveness of online review systems in a country is also influenced by its national culture (Koh et al. 2010). However, many e-commerce websites in China tend to directly copy ideas from those world’s leading ones in another country (e.g., the United States) without considering the culture differences. It has been proven that the ignorance of culture differences will cause the failure of those systems (Bricks 2006)). Thus, it is important for e-commerce sites in China to consider culture differences seriously when adopting others’ experience. Hence, the first thing we need to do is to investigate how culture across countries (China and the United States specifically) could impact the online review systems, and confirm that directly coping ideas of online review systems from the US context will not work well in the Chinese context, through exploring the culture differences between the US and China in terms of the behavior of providing reviews. Based on the confirmation, we then need to make clear how exactly online reviews theoretically impact consumers’ purchasing behaviors, especially in the Chinese context. Without knowing of this correlation, it is impossible to establish an effective online review system that could positively influence consumers’ products choosing process, strengthen trust among consumers and boost product sales. We intend to especially investigate the correlation between online reviews and product sales in order to build a more effective review system. In the end, our findings, together with the comparative analysis of our findings with those of other studies in the US context (differences are explained by the results in our cultural study), can further provide significant implications for the development of effective online review systems in the Chinese context.
We conduct two empirical study in this paper. Our first study aims to investigate the effects of national culture on consumers’ review providing behavior by exploring the review systems on Amazon US and Amazon China (www.amazon.cn) respectively. In particular, we investigate the differences across countries on various properties of online reviews, and seek to theoretically explain these differences in the framework of dimensions of national culture proposed by Hofstede et al. (Hofstede, 1980, Hofstede, 2001, Hofstede et al., 2010). We find that: (1) the way in which consumers provide online reviews is influenced by culture differences; (2) compared with those consumers in US, consumers in China tend to be less engaged in online review systems, provide less negative reviews, and value negative reviews more. In the second study, we establish a multi-dimensional review-related research framework, and create a panel data econometric model to explore the correlation between online reviews and product sales from the perspectives of number of reviews, quality of reviews, reputation of reviewers and the emotional tendency of reviews based on dataset collected from the Dangdang Books (book.dangdang.com, one of the largest Chinese online bookstores) (Fang et al. 2011). Our results show that: (1) number of reviews, emotional tendency of reviews and spotlight reviews are all positively correlated with product sales, while reviewer rank and length of reviews have negative effect on product sales; (2) the review voting mechanism of Dangdang is not significantly correlated with product sales. Based on the results of the two studies, we further provide several important guiding suggestions towards the development of effective online review systems in the Chinese context. These systems should pay attention to emotional tendency of reviews, reviewer ranking mechanisms, spotlight reviews, review format and review voting mechanisms.
The rest of the paper is organized as follows. Section 2 provides an overview of related works on online consumer reviews as well as those on the influence of national culture on e-commerce and online review systems. In Section 3, we provide a high level introduction of our methodology. We then describe the details of our two empirical studies in Sections 4 and 5 respectively. After that, we provide several suggestions towards effective online review systems in the Chinese context in Section 6. Finally, we conclude our current work and propose future work in Section 7.
Section snippets
Related work
In this section, we focus on reviewing previous works on exploring the impact of online reviews on products sales, and the inconsistent results regarding the impact of online reviews in the Chinese context and the US context. We then investigate the national culture differences between China and the US, which is considered as the most probable factor of the inconsistent findings about the effect of online review systems in previous studies, as well as the related cross cultural empirical
Overview of the methodology
In order to scientifically achieve our research objectives, we construct our research by integrating approaches of literature study, econometrics methods, empirical approach and methodology of comparison. Our research mainly consists of two empirical studies, based on the analysis of online reviews data collected from Amazon US, Amazon China and Dangdang. The research methodology is described in detail as follows.
In the first study, we aim to explore the differences across countries on various
Hypotheses
As stated, there exists a lot of cultural difference between the United States and China. We focus on studying how exactly the dimensions of national cultures are related to various properties of online reviews including the number of reviews, emotional tendency of online reviews, the length (word counts) of reviews, helpful and unhelpful votes of reviews, and spotlight reviews (eye-attracting reviews). In this section, we firstly propose hypotheses based on the analysis of inter-relationship
Experiment II: panel data econometric model
In this section, we conduct our second empirical study. We first propose hypotheses with respect to the correlations between the aspects of online reviews and product sales. We then test these hypotheses by fitting a linear panel model to our collected dataset.
Discussion
In this section, we propose several suggestions on the development of online review systems in the Chinese context based on our findings of the two empirical studies and literature review of others’ studies as shown in Table 7. The detailed explanations will be elaborated in the following paragraphs.
Conclusions and future work
In this paper, we study the problem of how to develop an effective online review system in the Chinese context by conducting two empirical studies.
Firstly, we conduct a cross-cultural study to examine how the national culture difference across countries influences online consumers’ behavior of providing reviews. We propose our hypotheses for different aspects of reviews based on Hofstede’s framework of national culture. The aspects of reviews include number of reviews, emotional tendency of
Acknowledgements
This work is supported by the Institute of Asian Consumer Insight (ACI) Seed Funding (M4080962.C90.601001) awarded to Dr. Jie Zhang and Dr. Qinghua Zhu.
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