Analysis Of E-commerce Market Efficiency

The prosperity of e-commerce has made great contributions to the national economy’s development, especially the massive progress of the online shopping, has not only stirred the whole economy, but increased the total employment rate. Whereas due to the virtuality, anonymity and instantaneity of online shopping, consumers have greater perceiving and purchasing risks,In order to resolve the problem of information asymmetry and to prevent the purchasing risk during the process of online shopping, consumers have increasingly turned to the support of electronic Word-of-Mouth-that is eWOM. As a consequence, the eWOM has become a major information source for consumers to make purchasing decisions. This paper studies the impact of different influential factors that affect the retailer sales in the context of high-involvement products, furthermore the factors that affect the market efficiency.While all the previous work focused on the impact of verbal information (VI) in either internal word-of-mouth (WOM) sources or external WOM sources, no work considers the nonverbal information (NVI). In this study, we analyze the relative impact of NVI in both internal WOMs and external WOMs, using a panel of sales and WOM data from JD.com and two external WOM websites (ZOL.com and PCOnline.com) over a four-month period (from Dec 2014 to Jun 2015). The results suggest that 1) NVI has a more significant influence on retailer sales of high-involvement products on internal WOMs than VI.2) Under the verbal environment, External WOMs has a more significant impact on retailer sales of high-involvement products than internal WOMs.The regression model has practical significance with a good predicting on the impact of eWOM to the sales rate. At the end of this article, this article proposes several suggestions to promote the healthy and orderly development of e-commerce industry, as well as improve the consumer welfare and market efficiency.