Leveraging social grouping for trust building in foreign electronic commerce firms: An exploratory study

Abstract

Internet development has fueled e-commerce firms’ globalization efforts, but many have met with only limited success. This often stems from the foreign firms’ limited understanding of a focal country's local culture and idiosyncrasies. Foreign firms are usually viewed as out-group entities, which lowers consumers’ trust in them. The extent of such a phenomenon varies. In locations where people are more skeptical of out-groups, a critical question is whether it is possible to transform such foreign out-group firms into in-groups, specifically with the support of popular social networking media. Based on Social Identity Theory and Trust Transference Process, five strategies leveraging social grouping and social ties to build trust for foreign electronic commerce firms were proposed. A survey was conducted to examine their effectiveness. The results suggest that social-grouping strategies are useful for in-grouping foreign out-group entities to build trust, and the effectiveness of strategies is determined by the social similarity and psychological distance between the consumer and the endorser. This has important implications for scholars and practitioners, both local and abroad, to leverage social grouping to boost Internet sales.