International Journal of Information Science and Management

Establishing Trust in Social Commerce through Social Word of Mouth

M. Hajli M. Hajli
Birkbeck, University of London, UK Allame Tabatabee University
m.hajli@bbk.ac.uk I. R. of Iran

F. Khani
Azad Univeristy, I. R. of Iran

Abstract
Social commerce, a new stream in e-commerce, enables hyper-informed
consumers to support the businesses in new product development. Hyper-
informed consumers are the results of online communication provided by social
media. These consumers have been empowered by Web 2.0 technologies to have
online communication, which drives value for the companies in new product
development. Trust is one the values that might be provided by the online
communication of individuals through sharing the knowledge and experience of
a new product. The paper sheds on new product development and trust concepts
along with social commerce construct theory in order to develop a research
model for investigating the impact of online communication of consumers,
which produce social word of mouth on trust building mechanisms. The results
from a survey reveal that social word of mouth, offered by social media,
increases the level of trust on new products. The conclusion, discussion, and
future research suggestion in the end of the paper support its contribution to the
track of marketing and innovation.

Keywords: Social Commerce, Social word of Mouth, Trust, Web 2.0, Social Media, PLS.

Introduction
Trust for many years has been one the main issues in the online business world.
Successful online businesses succeed by building trust in their customers (Salam, Iyer,
Palvia, & Singh, 2005). Those businesses are successful because they have worked hard to
develop their trust building strategies in online platforms. In fact, trust is one of the most
important factors influencing the success of an e-commerce platform (Gefen, 2000).
Trust in general is a key element in all economic and social climates; consumers may
feel uncertainty, specifically for new technologies, (Gefen, 2000) or for new products
where they may not have enough knowledge or experience about a product or service. Trust
is facilitated by knowledge transfer (Zhao & Lavin, 2012), which can be used very
successfully for new product development. When there is no market or little knowledge
about a new product or service in the marketplace, individuals prefer to seek out more
information than that provided by a company on their own websites (Hajli, 2013a). The
type of information that a customer needs can often be found in an offline environment via
40 Establishing Trust in Social Commerce through Social Word of Mouth

friends or family or through social media or other new technological developments.

With the recent advancement of the internet and emergence of Web 2.0 technologies
such as social media, a new way of communicating between individuals has been shaped,
called online communication (Hajli, 2013b). In this area, individuals use social media to
establish online communication and social interaction. Social media has empowered
consumers to be more active and thus, hyper-informed consumers, who can influence the
market, have emerged. Hyper-informed consumers are results of online communication
provided by social media. This is mainly because of the growing popularity of social
networking sites (SNSs) that facilitate interconnectivity of consumers; it is now very easy
to share their information and knowledge about a product or service (Liang & Turban,
2011). The new opportunities that social media now provide for potential customers has
developed e-commerce into social commerce (Hajli, 2012a).
Consumers can learn through their online communications and share their knowledge
in real time with their peers. Social interaction of consumers in an online context also offers
value for new product development (Füller & Matzler, 2007; Hajli, 2013a; Ming-Ji & Chin-
Hua, 2013). This highlights a valuable source of external knowledge (Su, Chen, & Sha,
2006), which in turn leads to open innovation (Füller & Matzler, 2007). Hajli (Hajli, 2013a)
argues that the interconnectivity of consumers on the internet should now be regarded as a
valuable source of innovation for businesses, particularly those involved in new product
development. The internet has been developed to provide low cost mass communication
and interactive facilities, thus providing opportunities for consumers to experience a new
product (Füller & Matzler, 2007) or share their experiences and knowledge with other
customers; this can be a fundamental basis for building trust in a business through social
word of mouth. In this way, both consumers and businesses co-create value
(Pongsakornrungsilp & Schroeder, 2011) for the whole business process.
Toward these ends, the present study explores the opportunities that social commerce
can provide to overcome the barrier to ensuring trust in an online context. More
specifically, this empirical research looks at the social interaction of individuals through
social media and textual information produced by consumers for new products; this can be
a valuable source for peers looking to evaluate a new product or service. The contribution
of this research is to give an alternative strategy to providing trust in an e-commerce
environment. In addition, the study brings to the desk the impact of social commerce on
innovation and new product development by suggesting how to build trust in a new product
or how to use consumers’ experience and knowledge to shape future business plans. A
survey has been conducted, using PLS-SEM to analyse the effect of social commerce on
trust.
This paper is organized as followed. The literature review on trust and social commerce
was initially undertaken before a theoretical framework was developed to propose the
research model. In the next section, the methodology and the way in which the data was
collected and analysed has been described. This is followed by the structural model and
discussion of the results. Finally, the implications and conclusions of the study conclude the
paper.

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 M. Hajli – M. Hajli – F. Khani 41

Literature Review and Theoretical Framework

Trust
Trust is a key element of e-commerce (Kim, Song, Braynov, & Rao, 2005; Morid &
Shajari, 2012) and distrust is one of the main reasons for e-commerce failures (Jones &
Leonard, 2008). Trust is an especially important factor in an online context, specifically
where risks are perceived to be high (Gefen, Karahanna, & Straub, 2003; Mutz, 2005).
Literature related to trust can be found in many disciplines such as information systems (Ba
& Pavlou, 2002; Salam et al., 2005), management (Mayer, Davis, & Schoorman, 1995),
marketing (Jin, Cheng, & Yunjie, 2009; Li, Zhou, Kashyap, & Yang, 2008), sociology (Das
& Teng, 2004) and innovation (Füller, Bartl, Ernst, & Mühlbacher, 2006; Hajli, 2013a;
Zhao & Lavin, 2012). There are different definitions of trust, but one widely accepted and
cited by many scholars comes from Mayer (Mayer et al., 1995), who defines trust as ―the
willingness of a party to be vulnerable to the actions of another party based on the
expectation that the other party will perform a particular action important to the trustor,
irrespective of the ability to monitor or control that other party.‖ Trust is a key factor in a
business as it influences consumer behaviour, leading to purchase intention (Hajli, 2012a;
Jones & Leonard, 2008; Ming-Hsien, Chandlrees, Binshan, & Hung-Yi, 2009; Yu-Hui &
Barnes, 2007). Trust is also important for those businesses developing a new product or
those seeking to find the correct market for a product or service (Hajli, 2013a). These
companies need to reduce perceived risk in the market for any new product by applying
different strategies; trust building is an essential strategy to make these companies
successful.
There are different dimensions of trust (Ba & Pavlou, 2002; Gefen, 2002), benevolence
and credibility being two of the main ones. This research measures the trust based on these
two dimensions. Benevolence is defined as repeated seller-buyer relationships (Ba &
Pavlou, 2002). Credibility usually is impersonal and relies on reputation information.
Credibility is defined as the belief that the other party in a transaction is reliable and honest
(Ba & Pavlou, 2002).
Although there is some literature for e-commerce, this method of trading is still a new
concept for many people (Jones & Leonard, 2008). Therefore, it is important to work on
methods to attract consumers to adopt e-commerce, such as trust building mechanisms.
More specifically, with the emergence of Web 2.0 and the popularity of social networking
sites, it might be easier to emphasise the familiarity for some of international e-commerce;
this could lead to increased trust (Hajli, 2012a). However, trust is an issue in social
networking sites as well (Shin, 2010). It is mainly because in many cases, consumers have
no prior knowledge about each other in their virtual networks. However, research shows
that interconnectivity of individuals through social media does offer trust to the network.
(Hajli, 2012a, 2012b; Hennig-Thurau et al., 2010)

Social commerce
Social commerce is a new stream in e-commerce. Social commerce uses SNSs to
establish social interaction of consumers to facilitate e-commerce (Kim & Park, 2013).
Social commerce is defined as a subset of e-commerce and relation based online business

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42 Establishing Trust in Social Commerce through Social Word of Mouth

(Stephen & Toubia, 2010). With the growth in popularity of social networking sites and
social media, more and more individuals are coming online to have social interaction
(Liang, Ho, Li, & Turban, 2011). Hence, e-vendors can now draw up business plans based
on social media strategies (Kaplan & Haenlein, 2010).
Today, e-vendors try different strategies to improve their relationships with consumers
to enable them to develop customer trust in their networks (Johann, Bartl, Ernst, & Hans,
2006). They now use social media to build these relationships (Hajli, 2013b). Social
interaction of consumers is likely to encourage other consumers to form beliefs concerning
ability to deliver and integrity (Wang, Yu, & Wei, 2012). Consumers use social commerce
constructs to produce text; this information then provides value for the business. The text
produced in these platforms can provide evidence that an online business has acted in an
honourable fashion based on the interest of its customers (Marshall, Moncrief, Rudd, &
Lee, 2012). Such information, produced through reviews or interaction in online forums
and communities, can be extremely valuable (Do-Hyung, Jumin, & Ingoo, 2007).
Consumers use different platforms provided by Web 2.0 technologies to develop their
relationships with other peers in the network. They may rate and review a product, or
participate in an online forum or community to share their knowledge and experiences
about a new product. In addition, consumers may refer and recommend a product or service
to other members of a network. Hence, they apply social commerce constructs, namely
forums, communities, ratings, reviews, recommendations and referrals to share the
information they have with others (Hajli, 2013a). Other consumers, who may be looking for
additional information to that provided by a company, apply this feedback in their
purchasing decisions. An innovative company looking to develop a new product, will set up
a forum or community to attract consumers to share their experiences and information on
these social platforms, thus providing an alternative source of information for new
customers.
Online communities, as a main construct of social commerce, give an opportunity
within a social sphere for people to share information and gain knowledge (Chen, Xu, &
Whinston, 2011). Online communities can be used as a source of product know-how
(Johann et al., 2006). Users interact in social commerce platforms in a collaborative online
environment (Curty & Zhang, 2011). It is also argued that online communication of
consumers in social commerce constructs provides social support, which leads in turn to
trust in the network (Crocker & Canevello, 2008). These types of support, which can be
both informational and emotional, persuade individuals to re-use the system (Bhattacherjee,
2001) or try a new product again. Hence, these communities are valuable sources of
innovation for the marketplace (Johann et al., 2006). In addition, communities are the main
drivers of change from e-commerce to social commerce (Huang & Benyoucef, 2013).
Ratings are another form of social commerce construct, providing valuable information
for other peers. A common system in use is numerical ratings, typically ranging from one to
five stars, from very low (one) to very high (five) (Nambisan, 2002). Reviews, another type
of social commerce construct, have potential to reduce uncertainty and increase consumer
trust. The quality of content and information provided by online reviewers can reduce or
increase uncertainty (Nambisan, 2002). Research shows that such reviews have added value

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 M. Hajli – M. Hajli – F. Khani 43

for the members of a community or for other customers (Heinonen, 2011; Keller, 2009).
Consumers might use recommendation systems to recommend a new product to other
members of a community. This again can build trust in future transactions (Huang, Cai,
Tsang, & Zhou, 2011).
Social commerce constructs, therefore produce social word of mouth. Social word of
mouth is the latest development of electronic word of mouth, using social media to give
more opportunities to consumers for having online communication. Social media empowers
consumers to generate content and share it via social platforms, provided by Web 2.0 and
Web 3.0. Word of mouth has received enough attention in research and practice (Cheung &
Thadani, 2012); however, social word of mouth is a new concept and with the increasing
popularity of social media this terminology will be soon used in marketing and information
systems. Consumers’ review in an online context is informants and recommenders and is
influenced by sales (Do-Hyung et al., 2007). However, it is limited to the individuals,
known in the community. Social word of mouth, through social media and social commerce
constructs such as communities, ratings, and referrals, overcomes the barriers and provides
opportunities to consumers for interacting online and getting to know peers. With the help
of social commerce constructs consumers mix and match tools in order to build up trust or
get familiar to products or services.
The above discussion can be summarised to conclude that online business are now
applying social media strategies to interact with consumers (Amblee & Bui, 2011) to
develop trust in their relationship with consumers. These interactions provide social word
of mouth, an enhanced source of knowledge to complement the information that e-vendors
provide on their websites. Consequently the level of trust will increase (Lu, Zhao, & Wang,
2010). Through such communication, consumers can inform a business all the way through
from design, development and testing to the product support phase (Nambisan, 2002).
Research shows that the social relationship of consumers through social media significantly
influences perceived trust of consumers (Pan & Chiou, 2011). Consumers use social
commerce constructs to interact online, which produces trust in the network (Hajli, 2013a).
Social commerce constructs, indirectly through familiarity and social presence, also have an
influence on trust (Hajli, 2012a). Indeed, positive textual information produced by
consumers create a higher level of trust in a business (Ba & Pavlou, 2002). A good example
of this is electronic word of mouth through online review, which drives trust in the network
(Ono et al., 2003). The quantity of textual information provided by other consumers
increases trust (Do-Hyung et al., 2007). This review of existing literature leads the research
to test the relationship of social commerce constructs and trust based on the proposed
model shown in Figure 1.

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44 Establishing Trust in Social Commerce through Social Word of Mouth

Figure 1. The research model

Research methodology
A survey has been conducted using an online questionnaire to test the proposed model.
The questionnaire items have been adopted from previous research to ensure the validity of
the research.

Subjects and data collection

The authors have developed a questionnaire to conduct a survey in different social
platforms. The target was to carry out an investigation in online forums and communities or
any other social platforms, where individuals rate and review or recommend and refer a
product or service. Therefore, an e-questionnaire has been developed using Google forms
and the link distributed to many online platforms. The email has been prepared to invite
individuals to participate in the survey. The authors have sent a number of emails and
messages to online boards, such as Facebook Company pages, with different online forums
and communities related to products or services. This was done in the two months of
January and February 2013. The authors targeted participants that have used social media
such as social networking sites. From 54 posts in different forums, communities or other
platforms where individuals rate, review, recommend or refer products or services, 300
emails were received. This produced 295 usable online questionnaires. These participants
were all previously using social media. This sample is made up of 60% female and 40%
male, with most of them (85%) living in the UK.

Data Analysis
The present research uses structural equation modelling (SEM) as different scholars

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 M. Hajli – M. Hajli – F. Khani 45

(Gefen, Rigdon, & Straub, 2011; Gefen & Straub, 2000; Ringle, Sarstedt, & Straub, 2012)
argue that this approach has advantages over Multiple Regression. In SEM, the authors
intended to estimate a set of causal relationships (Esposito Vinzi, Chin, Henseler, & Wang,
2010). Within the SEM approach, the authors have chosen partial least square (PLS). PLS
deals with small sample sizes, giving a unique advantage to the study using this method
(Chin, 1998; Ringle et al., 2012). PLS is appropriate for exploratory research, as the nature
of this study is (Naylor, Lamberton, & West, 2012). By using PLS, the authors can assess
the validity and reliability of constructs (McLure & Faraj, 2005). Finally as the model of
this research is new, PLS is seen as a good method to validate new models (Gefen et al.,
2011).

Reliability
Reliability can be tested by composite reliability in PLS-SEM, which should exceed
0.70 (McLure & Faraj, 2005). Composite reliability of all constructs, as shown in Table 1.0,
exceeds 0.70. In addition to this, the authors show the Cronbach’s alpha in Table 1.0,
indicating the research also has achieved this criteria for reliability.

Table 1. Quality criteria overview

Composite Cronbachs
AVE Reliability R Square Alpha
Forums and
Communities 0.637626 0.87492 0.866705 0.808463

Rating and Reviews 0.707632 0.906249 0.887731 0.86175

Recommendation and
Referrals 0.770802 0.909817 0.792682 0.851562
Social Commerce
constructs 0.584112 0.94363 0.934296
Trust 0.5569 0.862144 0.207749 0.804519

Validity
To test the validity of the research, the authors have taken different steps to look at the
validity from different angles. Initially, content validity through literature review (Gefen,
2002) in information systems, innovation and marketing has been carried out. Moreover,
the questionnaire items have been adopted from existing literature, which provides further
content validity (Gefen et al., 2003; Pavlou, 2003). In addition to these steps, the authors
invited other researchers to check that the scale items were unambiguous. As the
researchers had no previous knowledge of these scales, this step also ensured content
validity of the study (Wang et al., 2012). This also provided face validity for the research.
Comparing the main questionnaire with the proofread one showed up no obvious areas for
concern. However, some items were amended before being sent out for the pilot study. The
pilot study conducted with 10 students ensured complete validity before carrying out the
main test. The results from the pilot study were not included in the final data collection.
In the next step, the study applies both discriminant validity and convergent validity to

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46 Establishing Trust in Social Commerce through Social Word of Mouth

ensure the validity of the research (Chin, Gopal, & Salisbury, 1997; Hajli, 2013a). Average
variance extracted (AVE) has been used to assess convergent validity; this should be at
least 0.50 for each construct (Wixom & Watson, 2001). Testing disciminant validity was
the next step taken by comparing the square of the correlations among the latent variables
with the AVE of each construct (Chin, 1998). This is shown in Table 2.0.

Table 2. Square of correlation between constructs.

Forums and Recommendation Rating and
Communities and Referrals Reviews Trust
FC1 0.805721 0.690857 0.628516 0.318684
FC2 0.708251 0.501125 0.517481 0.371624
FC3 0.884578 0.660708 0.718851 0.355267
FC4 0.785633 0.524723 0.717593 0.357635
RE1 0.636621 0.873818 0.60891 0.337511
RE2 0.63483 0.887083 0.646462 0.336576
RE3 0.694634 0.872887 0.785346 0.431353
RT1 0.590789 0.673594 0.828256 0.332958
RT2 0.614472 0.651055 0.850263 0.284863
RT3 0.659759 0.720979 0.887174 0.362088
RT4 0.662115 0.573396 0.796552 0.391069
T1 0.372016 0.237946 0.22382 0.744124
T2 0.225745 0.188134 0.205464 0.700284
T3 0.366609 0.392531 0.422957 0.797341
T5 0.233522 0.298821 0.218714 0.703474
T6 0.381257 0.387621 0.368793 0.807093

In the last step of testing validity, the authors assessed the factor loadings of an
indicator. The loading should be greater than the construct of it than any other factor (Chin,
1998; McLure & Faraj, 2005). This step can give an overall picture to see the discriminant
and convergent validity in one place. As shown in Table 3.0, there is not a cross loading
and all the factors of each constructs (highlighted in Table 3.0) are above 0.70 and greater
than the constructs of it than their column. The authors need to mention that one of the
questionnaire items in trust (T4) had factor loading of 0.67, which has subsequently been
dropped. As this construct had enough items, it did not affect the whole construct.

Table 3.0 Cross Loadings

Structural model
For the structural model the authors used SmartPLS 2.0 software (Ringle, Wende, &
Will, 2005). The results show that the paths of the model are positively significant at the
0.05 level. The authors’ investigation shows that the model fits; R2 accounts for almost 42%
of the variance in trust. According to this result, an acceptable level of explanation has been
achieved in this research. This means that trust was affected by three second order

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 M. Hajli – M. Hajli – F. Khani 47

constructs of social commerce. Therefore, the model has a satisfactory level of explanation
power. The path coefficients of the model have been shown in Figure 2.0. This indicates
that social commerce constructs (0.455) have a significant effect on trust. Hence, the
positive relationship of SCCs and trust is supported.

Figure 2. Results of the PLS Analysis

* p <.05; ** p <.01; ***p <.001.

Discussion
E-commerce has given rise to the development of social commerce in recent years by
the emergence of social media and increasing popularity of social networking sites.
However, e-commerce is still new for many people as there are barriers to the adoption of
e-commerce technologies. Trust is one such barrier. It is even more difficult for a business
planning to develop a new product in a new market. In this case, the experiences and
knowledge about the product is limited. Consumers prefer to have more information
produced by other consumers rather than only that produced via the online vendor in the
website of the company. Enabled by social media and social commerce, consumers use
social commerce constructs - forums, communities, ratings, reviews, recommendations and
referrals to share their knowledge and experiences about a product or service for other
individuals, which form another type of word of mouth; social word of mouth. According
to the results of PLS-SEM, social interaction of individuals through social commerce
constructs offers social word of mouth a valuable source of trust to the network of
participants. The results show that potential buyers looking for social word of mouth related
to a new product rely on textual information produced by other consumers through ratings
and reviews. Users also participate in different online forums and communities by posting
questions about a product or service to gather knowledge and experiences about a product
they need, but for which they have little knowledge. Potential consumers depend more on

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48 Establishing Trust in Social Commerce through Social Word of Mouth

information and experiences provided by peers than what a company offers through a
website. Participants in social media in general look at the recommendations and referrals
of other consumers when they want to test a new product. These interactions, provided
through social commerce constructs, produce both informational and emotional support to
the network. Therefore, the interconnectivity of participants on the internet through social
commerce constructs can establish trust in a new product, thus supporting a business to
develop the new product. This is an indication of the impact of social commerce in
innovation, consistent with previous research (Hajli, 2013a). The results of the study give
an alternative strategy to development of trust in the online context. Moreover, the results
show that social commerce now provides a valuable source for innovative work by
supporting businesses in new product development. Companies can develop their social
commerce strategies by employing consumers to use their existing knowledge and
experiences. This strategy will enrich the development of a new product, a strategy which
cannot be achieved by a company alone.

Implications
The present research has a few theoretical and practical implications. The theoretical
implication of this research for e-commerce is that online communication of individuals on
the internet can be used to support trust building mechanisms in e-commerce platforms.
Trust as on-going issue in e-commerce is a challenging factor. This can be tackled with the
emergence of social media, providing a new research area in e-commerce to develop social
commerce constructs theory. Introducing social world of mouth might be another
contribution of this research, which can be a base for theory development in the literature of
word of mouth. The present study also has practical implications. There should be a focus
on the development of social commerce constructs such as forums and communities to
facilitate interaction of consumers and the sharing of knowledge and experiences about a
new product. Practitioners can apply social commerce strategies by putting customers to
work in new product development, from the design phase to testing of a product. Online
businesses also can develop their strategies to build up trust in their online platforms
through social commerce constructs.

Limitation and future research direction

This research is not free of limitations. The present research gathered 295 samples,
which is enough to run PLS-SEM, but not enough for generalising the results. Therefore,
any future study can develop the research to include more samples in different social
platforms where individuals use social media. The other limitation of this research was the
dropped item of trust construct T4, which has a lower than 0.70 factor loading. Testing the
model in other settings can be a future research direction by developing the model to
include more constructs such as consumers’ purchase intention. In addition, the research
can identify specific samples, using new products to generalise the results in an innovative
discipline. Finally, the study introduces social word of mouth; however, more theoretical
foundations are needed for a more precise development of this terminology in marketing
and information systems. The future research should develop this terminology and apply

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 M. Hajli – M. Hajli – F. Khani 49

theories such as social support in order to examine the influence of online communication
of consumers on the development of social word of mouth.

Conclusion
A survey has been conducted to examine the role of online communication of
individuals on the internet in building trust on e-vendor platforms. The research discusses
how social word of mouth has emerged from social commerce constructs influenced by
consumer`s trust in the network. More specifically, the research has investigated the value
that social commerce can offer to innovation. The model has been tested to identify the
influence of social commerce constructs - forums, communities, ratings, reviews,
recommendations and referrals - on trust in an online context. It has also examined how
these constructs can develop trust in consumers for new products. The results show that
social commerce constructs support the innovation process of a business by using social
media to provide tools to consumers to share their knowledge and information about a new
product or service. Data revealed from PLS-SEM analysis indicates that social commerce is
a new tool for businesses to test a new product and build up trust for new products or
services.

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