The role of social media in enhancing guanxi and perceived effectiveness of E-commerce institutional mechanisms in online marketplace

This study extends literature on e-commerce trust and repurchase intentions by exploring the role of swift guanxi and the perceived effectiveness of institutional mechanisms (PEEIM) in the context of a Chinese e-marketplace – Taobao. We explore how Taobao’s social media technologies (online reviews and instant messenger) can improve swift guanxi and PEEIM by increasing online interactivity and presence. We find that buyers’ PEEIM negatively moderates trust in online sellers and repurchase intentions. We show that swift guanxi, created by social media’s interactivity and presence, enhances trust, which further increases repurchase intentions. Theoretical and managerial implications and future research directions are discussed.