Fake Customer Reviews on Online Markets
As a “senior” buyer on all kinds of online marketplaces like Taobao, I was shocked by the data disclosed in an article How Fake Customer Reviews Do — and Don’t — Work. The article reveals that 4.5 million sellers in the thriving e-commerce sourced fake reviews in the past year. The dishonest strategy worsens the problem of asymmetric information in these online marketplaces.
Asymmetric Information on Online Marketplaces and Feedback System
The online marketplace has been one of the most successful business stories in the past decade as people now rely heavily on them to purchase almost everything, from clothing to daily commodities. Compared to traditional selling patterns (consumers visit physical stores to buy products), this kind of online retailing hides more information from the customers. As customers cannot see or touch the products, they solely rely on the pictures and some videos posted by the sellers. It is easy for the sellers to use fancy photos of some qualified products whereas sending interior goods to the buyers. Clearly, the sellers have some private information about their products, inducing the problems of asymmetric information.
Because of the asymmetry of information, buyers were only willing to buy some cheap products online at first, avoiding the risk of losing a lot of money for some broken products. The creation of reputation and feedback systems greatly improve the situation. They can help the buyers gain more information and decrease the degree of information asymmetry between buyers and sellers. Reading the comments from previous buyers and reviewing the pictures without any filters, the buyers can make better purchase decisions.
The Problem of Feedback System
Unfortunately, the report from Proserpio, et al. reflects that these feedbacks may no longer be trusted. I knew that some sellers in Taobao (a Chinese online marketplace) use fake consumer accounts to leave positive feedback in the comment area, creating a false impression that the products are wonderful. To add to that, the article discloses an even “smarter” mechanism for promoting these fake reviews: the sellers hire people to share authentic-sounding five-star comments of their product on other social media platforms like Facebook. These messages are hard to distinguish from the actual feedbacks from real consumers since they are written by human beings. They function just like advertisements except that the audience is not aware of the advertising.
The article confirms the effectiveness of these fake reviews. According to their analysis, the rating of products increased by an average of 0.16 stars within two weeks after sellers began to recruit reviewers. Though the boost was short-lived, it wastes consumers’ time and even money and makes them disappointed as well. Meanwhile, I believe this fake review mechanism harms the benefits of other honest sellers on the platform. With a couple of bad experiences, the consumers will suspect the authenticity of all the comments on social media and hesitate to buy good products from other sellers.
Potential Solutions
As suggested by the article, the e-commerce platforms have to take actions to filter out these fake reviews. To control the spread of fake comments on social media, the online marketplaces should partner with social media platforms to identify and remove them. Moreover, as bad sellers need plenty of accounts to spread fake comments, I would suggest that these platforms could utility a real-name system to ensure that each person can only have a single account. This action can raise the cost of promoting fake feedbacks. Also, the platforms can encourage sellers to provide a free return service so that the consumers can buy the products with little worries of getting unsatisfied products.
Conclusion
As online shopping experiences an accelerating rate of growth, it becomes a critical issue to regulate the online market and limit the asymmetric information. It is vital to the continuous thrive of online platforms to successfully control the spread of fake reviews and ensure the full functionality of the feedback system. As a heavy user of these e-commerce platforms, I sincerely hope that the platforms can take efficient methods and restrict unscrupulous businessmen.