E-commerce Product Networks, Word-of-mouth Convergence, and Product Sales

Driven by the network theory on status, we propose an interesting argument that network connection between two products affects their word-of-mouth (WOM) rating convergence and that WOM rating convergence affects their sales. To empirically validate this argument, we analyze data from China's largest business-to-consumer platform, Tmall.com. After addressing potential endogeneity issues and performing various robustness checks to ensure the consistency of our findings in various ways, we found that network connection between two products via recommender systems was related to the convergence of WOM rating between the two products. Moreover, WOM rating convergence between two products was associated with a decrease in the sales quantity of the product with higher WOM rating, whereas it was associated with an increase in the sales quantity of the product with lower WOM rating. Overall, WOM rating convergence was associated with an increase in the total sales quantity of the two products. Our findings provide important theoretical contributions and notable implications for e-commerce product marketing and platform design.