China’s market regulator is asking some eCommerce firms, like Alibaba-owned Taobao and Pinduoduo, to remove online shops with false quality reports, U.S. News reported.
In addition, the State Administration of Market Regulation asked that local regulators in the Shanghai municipality or Zhejiang province, where the Alibaba companies have headquarters, to work on carrying out inspections on quality testing institutions, the report stated.
In related news, the problem of fake reviews has been proliferating, PYMNTS reported.
Regulators in the U.S. and U.K. have both taken aim at the practice. Almost one in five respondents to a survey noted that product ratings were the most important factor in choosing a new merchant.
Content moderation has become important, Jim Radzicki, chief technology officer at digital customer experience firm TELUS International told PYMNTS.
It can have “significant consequences on brand reputation, customer loyalty and the overall customer experience, and potentially revenue loss, if left unaddressed,” he said.
Fake reviews boomed during the pandemic. A TELUS survey found that more than half of Americans had seen a rise in user-generated content, with 36 percent saying they had seen some sort of content that was inaccurate or toxic posts more than once per day, and over 40 percent saying they had disengaged with a brand even after just one exposure to the fake content. Forty-five percent said they lost all trust in a brand after that.
Amazon, for its part, said it uses major resources to act against fake reviews.
According to Radzicki, the solution is a tech-focused approach that works with artificial intelligence (AI), but he said companies should also work to connect with customers.
“Looking for opportunities to reinforce a desired outcome — such as a positive comment or review — has a dramatic effect on the likelihood of making a purchase or repeat purchase from a company,” he said.