Consumer-to-consumer (C2C) online shopping platforms like eBay and Alibaba’s TaoBao are some of the Internet’s most lucrative businesses in terms of both revenues and website visits – and yet they are also a fiercely competitive environment for the sellers who use them, with consumers often only becoming profitable after multiple repeat purchases (Chen, Huang, & Davison, 2016). The biggest threat to sellers’ e-commerce success? Badly-designed websites that send the message that the seller lacks credibility and service quality.

In fact, making a seller’s store or website appealing is essential in C2C contexts, where consumers carefully evaluate each seller due to their perception that shopping on C2C websites is significantly more risky than making a purchase on a traditional B2C platform (Xu, Lin, & Shao, 2010). With website quality being identified time and time again as a cornerstone of e-commerce success (Huang & Benyoucef, 2013), Chen et al. (2016) set out to explore how service, system, and information quality affect buyers’ economic and social satisfaction – and how relational capital (i.e. the relationship that develops between buyers and sellers on C2C platforms) can moderate the influence of satisfaction on repurchase intention.

Based on a survey of TaoBao shoppers, Chen et al. (2016) conclude that information quality (and, to a lesser extent, service quality) influence both economic and social satisfaction – and that, while economic satisfaction is the most important factor influencing repurchases, social satisfaction is only effective at increasing repurchase intention when paired with strong relational capital.

Figure 1. Chen et al’s (2016) model of how website quality affects repurchase intention

Key practical takeaways

The model that Chen et al. (2016) proposed and (for the most part) validated in their research is quite complex – the implications of their results, however, can be implemented relatively easily by sellers:

1. Focus on information quality first, service quality second. Up-to-date and relevant content helps buyers navigate the seller’s site with ease and efficiency, and is the most effective way to increase economic satisfaction. Therefore, sellers should prioritise information content elements such as Q&A in order to stimulate repurchases. Service quality – i.e. the timely handling of shipping and delivery, as well as prompt and polite responses to any issues or questions – can increase social satisfaction, and should be the second area of focus for sellers.
2. Economic satisfaction is a prerequisite for success, and it strongly influences the intention to repurchase. Therefore, sellers should ensure that their price-quality ratio is appealing. However, they should also be aware that price cuts and price promotions are easily copied by other sellers – and therefore should also invest in relational capital as a way to retain customers.
3. Without relational capital, social satisfaction is not effective at increasing repurchases. Sellers should foster trust and mutual respect with buyers by ensuring that payments are processed fairly, that service and product quality are up to par, and by providing buyers with perks such as personalised greeting cards or small gifts/samples included in the packages. Over time, this can build relational capital and buyer loyalty.

 

References

Chen, X., Huang, Q., & Davison, R.M. (2016). Economic and social satisfaction of buyers on consumer-to-consumer platforms: the role of relational capital. International Journal of Electronic Commerce, 21 (2), 219-248.

Xu, B., Lin, Z., & Shao, B. (2010). Factors affecting consumer behaviour in online buy-it-now auctions. Internet Research, 20 (5), 509-526.

Huang, Z., & Benyoucef, M. (2013). From e-commerce to social commerce: a close look at design features. Electronic Commerce Research and Applications, 12 (4). http://dx.doi.org/10.1016/j.elerap.2012.12.003