Electronic Word-of-Mouth as Market Signal: The Economic Impact on Consumer Satisfaction and Digital Market Efficiency in South African E-Commerce

Alyssa Shawntay Williams ()
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Alyssa Shawntay Williams: Rhodes University

No 15316875, Proceedings of Economics and Finance Conferences from International Institute of Social and Economic Sciences

Abstract: In digital economies, electronic word-of-mouth (e-WOM) has emerged as a critical mechanism for reducing information asymmetry in online marketplaces, functioning as an informal yet potent form of market signalling. As consumers increasingly rely on peer-generated content (such as reviews, testimonials, and social media commentary) to guide purchase decisions, e-WOM serves as a public good influencing market behaviour, perceived utility, and post-purchase satisfaction. Despite its growing economic relevance, there remains limited empirical understanding of how distinct e-WOM characteristics shape consumer utility and satisfaction - key drivers of demand stability and long-term market efficiency.This study investigates the economic impact of seven e-WOM dimensions (namely, argument quality, source credibility, message usefulness, trust in the message, valence, volume, and existing e-WOM) on post-purchase satisfaction among South African millennial consumers in the e-commerce sector. Employing a quantitative design with 405 respondents, data were analysed using Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) following rigorous validity and reliability testing.The results reveal that three dimensions function as significant market signals: argument quality demonstrates the strongest predictive power (? = 0.112, p

Keywords: Electronic word-of-mouth (e-WOM); Post-purchase behaviour; Customer relationship marketing; Generation Y (Gen Y); Millennials (search for similar items in EconPapers)
JEL-codes: D12 L81 M31 (search for similar items in EconPapers)
Pages: 23 pages
New Economics Papers: this item is included in nep-pay and nep-upt
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Published in Proceedings of the Proceedings of the International Conference on Economics, Finance & Business, Rome, Nov -0001, pages 208-230

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