A cross-country comparison of online deal popularity effect

Abstract

The paper examines the effect of online deal popularity for service deals in a cross-country context. A 2 (deal popularity: low vs high) X 2 (culture: collectivist vs individualist) quasi experimental design was used to collect data in Australia and Taiwan to examine the consumer reactions toward deal popularity information of service deals on e-retailing websites. Results show consumers' perceived performance and psychological risk mediate the effect of deal popularity on purchase intention both in the Australian and Taiwanese samples. In addition, consumers' reactions towards online popularity information for online service deals do differ across cultures. While high deal popularity increases the Australian consumers' performance and psychological risk perceptions, which in turn lowers their purchase intention, high deal popularity decreases the Taiwanese consumers’ risk perception and enhances their purchase intention. This paper contributes to the broader fields of retailing and services studies by providing insights for online retailers concerning how deal popularity can be leveraged as a means to reduce perceptions of risk for Taiwanese consumers but with caveats for their Australian counterparts. As a first study that examines the effect of online deal popularity for service deals in a cross-country context, it extends the body of knowledge in a fast-changing domain of consumer behavior e-commerce settings.