Do your social media lead you to make social deal purchases? Consumer-generated social referrals for sales via social commerce

Abstract

The advent of social commerce has resulted in a new business model for e-commerce. Although studies on this business model have increased over time, they have paid less attention to its core business model: consumer-generated social influence on sales on a social commerce site. Therefore, in this paper, we examine the effect on sales of social sharing, such as Facebook "likes" and Twitter tweets, which generate social influence, using data from major social commerce companies. We find that consumer-generated social referrals regarding deals significantly boost sales in social commerce. When we examine deals involved in national sales, this finding holds only for Facebook but not for tweets. These findings have the implication for managers that not all social referrals are meaningful in increasing sales for their business.