Blessing or Curse? How Peer Customer Endorsement Shapes Product Ratings on Social Commerce Platforms

Abstract

Influential celebrity endorsement (ICE) and peer customer endorsement (PCE) are two widely adopted promotional strategies in social commerce. Prior literature has primarily examined the effect of ICE, largely overlooking the effect of PCE. Drawing on social influence theory, we investigate how PCE affects subsequent product ratings. On the one hand, PCE could increase product ratings by providing an alternative information source to reduce the product uncertainty (i.e., informational social influence). On the other hand, PCE may decrease product ratings by shaping high pre-purchase expectation and negative post-purchase expectation disconfirmation (i.e., normative social influence). Using a difference-in-difference approach, we find that PCE significantly decreases 9.5% of product ratings. The negative effect is more pronounced for products with higher customer engagement and insurance service. Our study contributes to research by examining how and why PCE affects product ratings. We also inform sellers to strategically manage the potential negative effects of PCE.