The Roles of Electronic Word of Mouth and Information Searching in the Promotion of a New E-Commerce Strategy: A Case of Online Group Buying in Indonesia

The purpose of this study is to examine the determinants of customers’ intention to engage in online group buying, which involves electronic word of mouth, information searching, trust in the vendor, trust in the product, monetary value, hedonic value, and utilitarian value. The research model was analyzed using partial least squares of 196 respondents who had previously completed an online group buying transaction. The data were processed using SmartPLS 2.0 M3 software. The study found that electronic word of mouth significantly influenced information searching and trust (in both the vendor and the product). Further, information searching only significantly influenced trust in the product, although it had a strong correlation with all the types of perceived value (monetary value, hedonic value, and utilitarian value). In conclusion, we believe that trust in the vendor, monetary value, and hedonic value have a significant impact on customers’ intention to engage in online group buying in Indonesia.