Implications of online social activities for e-tailers' business performance

Purpose - Despite the growing popularity of internet based social media on e-commerce platforms, systematic examination of the emerging phenomenon is scarce. This paper aims to study whether online retailers' social activity on e-commerce platforms improves their business performance, and if it does, what are the underlying mechanisms. Design/methodology/approach - The paper proposes a typology of online retailers' social activities on e-commerce platforms. Then drawing on social capital theory and social network theory, the authors develop hypotheses that relate online retailers' social activities to their business performance. The hypotheses are tested using a large dataset collected from an e-commerce platform in China. Findings - The paper shows that: online retailers' social activities for friend-making improve their business performance, regardless of the directional attribute of the activities; social activities for advice-seeking decrease online retailers' business performance; and social activities for advice-giving increase online retailers' business performance. Research limitations/implications - The data in the empirical study are from an e-commerce platform in China, hence the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed hypotheses further. Practical implications - The paper includes implications for e-commerce market makers and online retailers operating on e-commerce platforms. The authors show that online retailers' social activities on e-commerce platforms can be an important source of business value. However certain types of social activities may hurt online retailers' business performance, implying the necessity of a thoughtful social activity strategy in online marketplaces. Originality/value - This paper represents an early effort to study whether online retailers' social activities on e-commerce platforms improve their business performance and the underlying mechanisms of the effect