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  • Shivani Pai

E-commerce brands and their battle with fake online reviews

E-commerce brands and their battle with fake online reviews

E-commerce witnessed a boom in 2020 after the pandemic forced people to tweak their buying style. The 'new normal' that people had to rely on brought on the accelerated digitization. However, a booming e-commerce market also gave rise to some unethical practices. Such as the widespread use of fake online reviews

The booming market for fake e-commerce reviews

According to a new study, online reviews will influence $3.8 trillion of global e-commerce spend in 2021. Online reviews serve as a bridge to fill in important information about the seller to the buyer. While there are well-intentioned valid users creating online reviews, there are also malicious users and bots which are employed to create fake reviews to benefit a brand. When translated in economic terms, the impact of fake reviews on global online spending is $152 billion.

To make e-commerce function effectively, big players like Amazon devised a rating and review system which allows customers to make their purchases with gusto. But because these reviews are typically a significant factor in search rank algorithms and thus have a big impact on product visibility and sales, these systems often also create powerful incentives for sellers to manipulate their products' rankings through fake reviews. A prominent factor in the search rank algorithm, the reviews play a significant role in increasing the product visibility, thus leading to more sales. And due to this very aspect, sellers are opting for unethical means to bump their product visibility.

To combat this issue, e-commerce service providers have automated tools that will identify and remove fake reviews. However, fraudsters are becoming more refined with their techniques to stay one step ahead of the platform algorithms, making the issue problematic. Industry giants like Google, Amazon, TripAdvisor, Facebook, Yelp also continue to fall victim to review fraud.

Of the other major companies, Yelp is known to take an aggressive stance to curb the review fraud with its proprietary algorithm that filters 16% of fake reviews. Meanwhile, Google, Amazon, and the others stated that they too are addressing the problem in their way.

In a research conducted by Harvard Business Review, one of the most common ways to procure these reviews was creating private Facebook groups. Sellers would offer people monetary incentives to buy their products and ask them to drop a five-star review. The groups would, now and then, get dissolved, and other groups serving the same purpose would crop up. The research also found that as per an estimate, close to 4.5 million sellers sourced fake reviews through these private Facebook groups in 2019.

Now, the matter of fact is whether fake reviews help in favorable results. In short-term yes, the data points out that it is incredibly effective. For example, with sellers' recruitment of reviewers, the products underwent an average 12.5% bump in their sales ranks.

Fake Reviews and their impact on a brand

However, the long-term impact is much different. After fake reviews established a positive reputation for the product, real consumers bought these products and left genuine reviews. But, the increase in sales, reviews, and ratings fizzled away in a few months. Soon after sellers stopped buying fake reviews, their products' average ratings fell by 6.3%, their sales ranks fell by 21.5%, and one-star ratings from unhappy customers flooded the product page. It is because fake reviews glorified lower quality products and thereby influence customer's buying decisions. But, towards the end, when the customers' were disappointed with the purchase, they expressed it in reviews.

Not only do customers face the brunt of review fraud. But, it's also the platform that suffers a blow as well. So what do such companies do in such cases? Earlier in the month, Amazon cracked down on 600 Chinese brands on its platform who were manipulating the review system. In addition, the company announced that about 3,000 merchant accounts that these brands backed were closed to fight fake reviews and other policy violations.

It may come as a surprise but paying for positive reviews is not uncommon on Chinese e-commerce platforms. But, to combat the same on its global platform, Amazon undertook a campaign against such activities in May. It affected thousands of merchants from in or around Shenzhen, China. In 2019 alone, Amazon had spent over $500 million and employed 8,000 people to curb the fake review menace. However, it had taken the company an average of more than 100 days to remove a fake review. As a result, it leaves more than enough time for a seller to generate profit by manipulating the review system.

Even if there are valid users, online space has malicious users and bots who can hurt e-commerce authenticity and revenue.

In the 2021 report by customer acquisition security vendor CHEQ, an average rate for fake reviews was 4% across platforms, including Amazon, TrustPilot, Yelp, and Tripadvisor. It refers to the economic impact on the global e-commerce market size of nearly $4.3 trillion in 2020 due to fake reviews. It breaks down to around $28 billion of consumer spending in the US influenced by fake reviews, $6.4 billion in Japan, $5 billion in the UK, $2.3 billion in Canada, and $900 million in Australia.

It's a constant battle to identify and remove fake reviews and sustain consumer trust. Discovering a way to reduce this activity will help e-commerce platforms and enable an enriching buying experience for the customers.

Customer reviews have a much more weighted impact than one thinks. They also help a business understand whether its services are driving the desired results. According to a survey, 68% of consumers are more likely to trust a business if they see positive reviews about them. Therefore, the data related to customer reviews can be precious for the companies to grow and to improve customer loyalty.

Scraping customer reviews can put you ahead of your competition and enable you to deliver good customer service. Further, the business must remember that even a negative review is as advantageous as a positive review. Since the former will make you carry modifications on the product or the service to pander to the masses. In the digital world, where data is king, this user-generated information will prove to be a lot valuable for the success of a business.

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