An Empirical Study of Guarantee in Service E-Commerce

Service e-Commerce (SeC) is emerging as a booming form of e-commerce where various services are contracted, managed, sold, and even delivered via the Internet. However, the uncertainty of service quality due to information asymmetry has been a major challenge to the development of SeC. Some SeC platforms tried to promote service business by lowering buyer’s perceived risk through the service guarantee mechanism. However, the mechanism seems not very successful to lift the low participation rate. This study investigated the effects of service guarantee on service e-marketplace by examining the case of zhubajie.com, a well-known service e-marketplace in China. A total of 30,406 providers (including 406 service-guarantee and 30,000 non-service-guarantee providers) were collected and analyzed. The analyses found that there are different modes for low-reputation and high-reputation service providers to participate in the service guarantee. In addition, results also show that service guarantee only improves business performance for the service providers with high reputation. For low-reputation service providers, the service guarantee mechanism does not have significant effects. Implications and suggestions were made to guide future practice and research in similar contexts.