Digital-social construction of willingness to pay in online marketplace: Economic sociology of the digital functional food market in Indonesia

Abstract

Spanish

French

This study explores the phenomenon of digital-social construction in the form of anonymous transactions, asymmetric information, and unlimited access in online marketplace. The study was conducted by processing digital data of 5131 comments, descriptions, and rating records of 1988 IDs of functional food products sold at Bukalapak, one of the largest marketplaces in Indonesia. Using Python and Google Studio software, digital-social interactions are mapped and visualized based on four conceptual frameworks of economic sociology, namely social embeddedness of market, product standardization, intersubjective construction of symbolic value, and willingness to pay. This study marks a new chapter in the study of contemporary economic sociology, in which conventional conceptual frameworks are applied to uncover digital market phenomena using research methods that fully process and analyze big data in the business field.

Keywords

Digital-social construction economic sociology functional food value construction willingness to pay

Introduction

Social construction theory, according to Fairhurst and Grant (2010), has roots in the theories of symbolic interaction (Mead, 1934) and phenomenology (Schutz, 1970), which later becomes strong through the phenomenal work of Berger and Luckman, entitled ‘The Social Construction of Reality’ (1966). Mannheim (1936) refers to it as a network of interaction of social forces from which various kinds of observations and thoughts arise. In economic sociology, the market is generally known as a social structure characterized by extensive social relations between actors (Lee, 2019).

Market analysis, despite its technical focus on the economic aspect of purchasing, can still shed light on the social construction of markets (Lee, 2019). Furthermore, referring to the basis of this understanding, Storr (2010) applies social construction theory to analyze the market, in which the market is socially constructed and consisting of two phenomena: (1) those caused by individual social actions and (2) those known to individuals through socialization in the community.

According to Storr (2010), the market is a product of social actions that exists as an objective as well as a subjective reality, integrated into a ‘social body’ (Mises, 1949). As an objective reality, referring to Berger and Luckmann (1967), the market is positioned as a social order that is a product of human, or more specifically, perpetual production of human, ‘. . . in the course of his ongoing externalization’. Meanwhile, as a subjective reality, the market maintains its existence by manifesting itself in the routine of the actors, which is the essence of institutionalization (Berger and Luckmann, 1967).

Both types of reality in regular market systems – borrowing the term from Hoffmann and Glückler (2022) – can also be found in the online marketplace structure. It becomes the arena for digital-social interactions among the actors, which includes product descriptions, comment columns, reviews, and ratings, coined as the reputation system. It is observed in Bukalapak, one of the largest online marketplace platforms in Indonesia and the object of this study, which is visited by approximately 23,096,700 users per month with the most number of installs on the Play Store (Ginee, 2022).

Thus, the main differences between conventional and online marketplaces are the type of social structure and patterns of interactions. In the conventional market, interactions can transpire with ‘real human beings’; thus, consumers form trust by touching, moving, and seeing the product from all sides (Umesh, 2018). Meanwhile, in the online marketplace, this social market interaction activity is mediated, conducted in the online arena, and characterized by many-to-many instead of one-to-one (Thompson, 2020), which can be referred to as the way of the actors ‘[to] create trust by providing reviews of participants’ prior transactions’ (Pavlou and Dimoka, 2006; Täuscher and Laudien, 2018). In addition, the characteristics of online marketplace can be observed from its advantages, ‘. . . such as prompt access to a lot of clients, high recognizability, first contact venue for buyers, ready technical solutions, a payment system, and logistics’ (Kawa and Wałęsiak, 2019). However, both types of markets share highly demanding arenas of social interaction, as described by Beckert (2009).

The market meaning model (Beckert, 2019) reduces uncertainty and asymmetric information in determining consumer willingness to pay (WTP), facilitating the exchange of meanings and perceptions of product quality. This is particularly relevant in anonymous online marketplaces where the buyer cannot know the product’s quality until the transaction is successful (Serpe, 2021), leading to an asymmetric information situation that may generate trust issues. Online marketplace addresses this issue with a reputation system, which facilitates successful transactions and overcomes fraud (Gregg and Scott, 2006), builds trust, and overcomes trade-related issues (Tadelis, 2016a). Thus, a reputation system also creates symbolic qualities (Beckert et al., 2017; Pratt, 2007) through complex social relations. However, academic studies have focused more on the technical role of reputation systems in facilitating trust and trade.

In this regard, we analyze the reputation system as an arena structure where economic actions of the actors in online marketplace generate material and symbolic value (Solek, 2021). This generated value can then affect the WTP of the users in anonymous transactions, in which the customers and the stores are in a remote distributed environment (Fan and Liang, 2008). Therefore, this generated value in anonymous transactions has relevance to the market of complementary food for breast milk (MPASI) products, one of the functional foods (FFs) with a large market in Indonesia (Sari et al., 2019) that reaches IDR 37,355 billion.

According to Zulhamdani et al. (2020), an increase in the level of education and income has an impact on the development of the FF market in Indonesia. Despite the Covid-19 pandemic, the FF market in Indonesia continues to experience significant growth until 2023 (Lestari, 2021). It has further piqued the interest of the government of Indonesia in the FF industry, specifically in the midst of a budget deficit of IDR 9 trillion for the Social Security Administrative Body (BPJS) for Health in 2018 (Sari et al., 2019). Thus, the development of the FF market is expected to help reduce public health costs.

Moreover, the global market growth of FFs is closely linked to the ‘health and wellness’ trend, with a value of US$625 billion in 2012 (Khan et al., 2013). In Europe, the United Kingdom, Germany, France, and Italy, FFs have a combined market value of US$7.6 billion (Bech-Larsen and Scholderer, 2007). Similarly, in Asia and China, wherein FFs are better known as ‘health food’, the market has experienced a dramatic increase in growth as to becoming the largest market in the world with a value of US$42 billion in 2018 (Cong et al., 2020). In Japan, the FF market value is estimated at US$11.7 billion in 2003 (Bech-Larsen and Scholderer, 2007), which is significantly higher than the UK market in the same year. Thus, MPASI products in anonymous transactions were chosen as the analysis model because they are related to infant health and provide a strong and easy-to-study example of value and trust construction.

Accordingly, this study develops four questions. The first question explores the form of digital-social embeddedness in the online marketplace from the perspective of social embeddedness introduced by Granovetter (1985). The second question observes how material valuation is constructed in the online marketplace from the viewpoint of commodity standardization introduced by Beckert (2009). The third question reviews how symbolic valuation is constructed in the online marketplace from the context of the intersubjective value construction theory by Beckert (2019). Then, the fourth question examines how the complexity of the digital-social context in the structure of the online marketplace can direct and determine WTP. This question aims to continue the proposition offered by Beckert (2019) regarding WTP that is limited to the art market. These questions are crucial for enhancing product assessment and developing a suitable marketing model for FFs in the Indonesian online marketplace.

Conceptual framework

Each of the four concepts employed in this study focuses on a particular part of the entire digital-social construction in the online marketplace, which is illustrated in Figure 2 in the ‘Method’ section. In this section, the four concepts are discussed in more depth to obtain the full conceptual context.

Consumer behavior: Interaction and social embeddedness

Granovetter (1985) emphasizes the idea of a positive relationship between individual and institutional behavior and social interaction. This idea contradicts the notion of ‘formalism’ (Schneider, 1974) and ‘economism’ (North and Thomas, 1973). Granovetter rejects formalism as it positions economic behavior, even in ‘tribal’ communities, as quite independent of social interaction (Granovetter, 1985; Schneider, 1974). Meanwhile, economism places an inordinate emphasis on behavior in the context of rational individual self-interest (Granovetter, 1985).

These two points of view greatly limit the relationship between individuals and institutions and social relations, thus interpreting it as independent, as emphasized by Granovetter that it ‘is a grievous misunderstanding’ (Granovetter, 1985). These points also explain the position of Granovetter that focuses on reciprocity between individual actors embedded in social networks within a given market system (Nowak and Raffaelli, 2022). Therefore, it may be argued that economic behavior is heavily influenced by patterns and forms of social interaction in the market arena, which in this regard concerns conventions of product values and prices.

Granovetter argues that market exchange shapes the expectations of market actors through its structural, institutional, and cultural embeddedness (Granovetter, 1985; White, 1981). Consumer habits are inseparable from the social construction in the market, as behavior is embedded in interpersonal networks (Granovetter, 1985). Economic actors are not passive ‘atoms’ but rather embedded in concrete social relations (Granovetter, 1985: 487), emphasizing both individual and collective agency. These relations are key to understanding the concept, with positive behavior creating trust and stabilizing expectations, while negative behavior leads to distrust, malfeasance, and uncertainty (Beckert, 2019). Positive relations can temporarily transform a product into a tradable good in the market (Callon et al., 2002).

Standardization: Measurement of objective quality

Market standardization measures refer to standards that allow the presentation of an objective description of quality (Beckert, 2009) based on the physical and empirical information of a certain commodity. Nurmajesty et al. (2022) discover that commodity valuation based on physical standardization is generally applied in the concept of economics. This standard only refers to the technical and functional quality of a commodity; thus, consumers are not challenged to determine the value and price and how this quality can solve a specific problem, ‘. . . such as getting from point A to point B, or satisfying one’s hunger . . .’ (Beckert, 2009).

Beckert (2009) explains that the basis for material valuation can only be applied to simple products, such as steel springs or used cars, in which the basis for classifying value is merely a matter of technical standards. Consumers can quickly determine the value preference of these products by referring to the price difference. Akerlof (1970) coins this simple product market, which determines product quality solely on its physical value, ‘The Market for Lemons’, which Beckert later criticized. According to Nurmajesty et al. (2022), this type of market is closely related to asymmetric information, ‘rendering potential buyers unable to know the exact quality of the goods’, which then creates market uncertainty. Therefore, a broader approach is required to assess the overall quality of commodities.

Intersubjective relation: The process of forming symbolic value

Beckert (2019) introduces the ‘Market from Meaning’ model as a new perspective on the value and price formation process of products in the market. The key to this formation lies in the intersubjective relations of actors, institutional relations, and structural characteristics in the market arena. Four processes of value formation in the market are (1) intersubjectively sharing narratives, (2) shaping through mutual observations, (3) advertising and branding, and (4) using the products (from the consumer side) (Beckert, 2019). Thus, commodities are unable to be valued using ‘The Market for Lemons’ model of Akerlof (1970) that emphasizes objective quality as the basis for determining price and value because valuation in the market arena is mainly based on symbolic qualities (Beckert, 2019). Each of these processes is described in more detail as follows.

Beckert (2019) states that uncertainty in the market can decrease through intersubjective activities, which create cognitive overlaps regarding product quality. Trust in product price and value is built or destroyed discursively during these interactions, and each actor in the market arena confirms or challenges this trust. Thus, value and price preferences are not exogenously provided nor are they a reflection of individual taste, ‘. . . but rather an endogenous outcome of the market process, and one that is socially shaped’ (Beckert, 2019).

Price and value of products in the Market from Meaning model are collectively recognized and inaccessible individually. In the art market, product value is not intrinsically attached to the product, but rather arises from the immateriality of what qualifies as quality (Beckert and Rössel, 2013). Thus, the price and value of art products are highly dependent on intersubjective relations, where actors mutually observe one another’s evaluations and decisions, leading to value construction (Beckert, 2019; Beckert and Rössel, 2013).

In the Market from Meaning model, the breadth factor of a product is recognized as important and must be disseminated through advertising and branding to form conventions of value and price. Actors in the advertising and branding category exhibit, recommend, write, and analyze commodities (Beckert, 2019). Publishing value and price strengthens the mutual observation process, ensuring that value and price are widely recognized and involving more actors. These actors take note of the product’s price development, books published, and articles written about the artist (Beckert, 2019).

WTP: Constructed in digital-social interactions

The WTP discussed by Beckert (2019) in relation to the Market from Meaning model is limited to conventional markets, in which the process of mutual observation in the market arena that provides information for individual judgment on product value and quality continuously occurs in a feedback loop process. This process can ultimately form product price, a result of conventions from market actors following the successful observation of product trust. Furthermore, the process of reaching these conventions can be referred to as an assessment of product quality, in which changes can affect WTP (Beckert, 2019) based on prices resulting from the social processes in the market.

Referring to Resnick et al. (2000), the assessment process in online marketplace can form a positive or negative reputation for stores and products. This reputation plays an important role in the online transaction system (Resnick et al., 2000), encouraging sellers to implement various strategies in the system to ensure that their stores and products obtain a good reputation. Moreover, in the context of the art market, Beckert (2019) states that every change in the assessment of product quality and value can strengthen or weaken the position of the artists in the market arena. It can be applied to online marketplace, in which the assessments of market actors of buying and selling activities in the marketplace structure can weaken or strengthen the reputation of a product or a store, which in turn influence the WTP decisions of the consumers.

Method

This digital research uses unobtrusive methods to gather primary data (Anandarajan, 2010) from digital footprints of economic activities in online marketplaces. Python software and Google Data Studio are utilized to extract, process, and analyze the data, which are then analyzed using a digital-social data analysis method based on a conceptual framework. This aids in obtaining secondary meanings during data interpretation, including hidden meanings related to the nuances of behaviors, perceptions, and trends (Punziano et al., 2023). The following figures (Figures 1 and 2) describe a series of processes of the methodology of operationalization employed.

Figure 1.

Methodology operationalization (constructed by the authors).

Figure 2.

Analysis operationalization (constructed by the authors).

Data collection

Data collection started from determining product brands, referring to the types of products with the largest market in Indonesia. Several brands sold in the Indonesian market are Promina, Milna, Cerelac, Bubur Sun, Nayz, Heinz, Gerber Cereal, Plum & Blum, Gasol, and Yummy Bites Cereal. Next, the data scraping process was applied using the Python programming language, referring to the core keywords based on the concepts adapted to the type of product and data structure in Bukalapak. The core keywords are presented in Table 1.

Table 1.

Keywords for data scraping.

No.	Criteria (based on theories)	Operationalization	Core keywords
1.	Social embeddedness	Networks; the response of actors in the digital market field; the expectations of actors	Alhamdulilah; Bonus; Maaf (Sorry); Thank; Mengecewakan (Disappointing); Recommended; Thx; Ramah (Friendly); Makasih (Thanks); Puas (Satisfied); Terimakasih (Thank You); Terima kasih (Thank you); Suka (Like)
2.	Standardization	Physical and empirical information; the technical and functional quality of commodities	Bahan (Ingredients); Rasa (Flavor); Vitamin; Mengandung (Contain); Tumbuh (Grow); Protein; Zat (Substance); Gizi (Nutrient); Nutrisi (Nutrition); Tekstur (Texture); Sehat (Healthy); Aman (Safe); Kalsium (Calcium); Omega; Alami (Natural); Terbuat (Made of); Serat (Fiber); Kandungan (Content); BPOM (National Agency of Drug and Food Control); Menstimulasi (Stimulating); Diperkaya (Enriched); Lumer (Melting); Latih (Train); Fungsi (Function); belajar (Learning); MPASI
3.	Value construction	Social interaction in the digital market field; consumer assessment	Barang bagus banget (Very good product); Murah (Inexpensive); Aman (Safe); Sampai (Arrived); Rapi (Neat); Pengiriman cepat (Fast delivery); Sesuai (As ordered); Original; Sampe (Arrived); Top; Diterima (Accepted); Baik (Great); Good; Baru (New); Masih lama (Long expiry date); Rusak (Damaged); Cepet (Quick); Cepat (Fast); Terjangkau (Affordable); Diskon (Discount); Penyok (Dented); Kualitas produk sangat baik (Very good quality); Komunikatif (Communicative); Konfirmasi (Confirmation); Rating
4.	Willingness to pay	Individual judgments; feedback loop	Beli lagi (Repeat purchase); Recommended; langganan (Regular customer)

Source: Constructed by authors.

MPASI: market of complementary food for breast milk.

Digital-social data analysis

The data in this study were analyzed using measurement indicators based on the conceptual frameworks. They also ensure that the analysis does not deviate from the perspective of economic sociology, which emphasizes the aspect of social interactions in the market arena as a form of digital-social construction process in the context of the dynamics of evaluating products and the behavior of actors. In this regard, it is relevant to employ the social data analysis technique. The measurement indicators are presented in Table 2.

Table 2.

Measurement indicators.

No.	Criteria (based on theories)	Measurement indicator
1.	Social embeddedness	‘Jaringan Sosial’ (Social Network); ‘Interaksi Sosial’ (Social interaction); ‘Percaya’ (Trust); ‘Tindakan Ekonomi’ (Economic Actions); ‘Pengaruh Sosial’ (Social Influences); Discouraging Malfeasance
2.	Standardization	‘Nilai Fisik’ (Physical Value); ‘Kualitas Objektif’ (Objective Quality); ‘Informasi Fisik dan Empiris’ (Physical and Empirical Information); ‘Standarisasi Fisik’ (Physical Standardization); ‘Kualitas Teknis dan Fungsional’ (Technical and Functional Quality)
3.	Value construction	‘Pertukaran dan Reproduksi Narasi’ (Narrative Exchange and Reproduction); ‘Klaim atas Validitas Nilai dan Harga’ (Claims on Value and Price Validity); ‘Dikenali Bersama’ (Known Together); ‘Observasi Pembentukan Nilai’ (Observation of Value Formation); Mutually Observe; Advertising and Branding; Exhibiting Commodity; Recommending Commodity; ‘Orang Kredibel’ (Credible People); Influence the Opinions; ‘Orang Ekslusif’ (Exclusive People); Social Distinction
4.	Willingness to pay	Uncertainty; Asymmetric Information; Value Judgment; Average Quality; Make Purchases

Source: Constructed by authors.

Figure 2 illustrates the usage of each of the four conceptual frameworks in the analysis phase. The concept of social embeddedness is used to analyze the social networking context, which is a social structure, in the online marketplace that forms digital-social constructions, where each actor and system are involved in embedded-intersubjective relations. Meanwhile, the concept of Beckert is applied to examine the ‘product’ of these relationships, namely the process of forming initial material value – which occurs in product descriptions – is an action taken by the seller to provide information on physical standardization – symbolic value – through buyer feedbacks in the reputation system and how WTP is influenced by the overall social digital actions.

The concept of product valuation is important because, although food products focus on the material value and technical functions, in anonymous transactions, buyers are unable to directly access the intrinsic characteristics and compare them to those of similar products – as Beckert (2019) mentions in the context of the art market. Therefore, this concept focuses on observing the social characteristics of product quality formed through an intersubjective process in the reputation system. Finally, the analysis stage results in a narrative abstraction of data and predetermined conceptual frameworks.

Results

Bukalapak as an online marketplace, a point where ‘actors gather and frame their actions vis-à-vis one another’ (Beckert, 2010; Fligstein, 2001), consists of three parties, that is, Bukalapak, pelapak (sellers), and buyers. These three parties are involved in the process of interrelations between the three social forces (Beckert, 2010) in the online market, namely cognitive frames, networks, and institutions. As the manager and provider of the marketplace platform, Bukalapak establishes a reputation system for buyers in the form of a ‘feedback’ feature, which is an arena where trust builds naturally in long-term relationships (Resnick et al., 2000).

Technically, Bukalapak is designed to accommodate transactions for various types of products, such as online commerce, online to offline, virtual product, and investment solution. Of these various transaction models, Bukalapak acts as a liaison between sellers and buyers by taking advantage of the advertising costs of the sellers. To sell, users only need to register, log in, click the My Store icon, and then click Start Selling to fill in the data of the product being sold. Meanwhile, buyers can choose, pay, monitor transactions, and provide feedback on the reputation system when the product has been received. Regarding controls to maintain a conducive environment for buying and selling interactions, Bukalapak establishes various mechanisms and features, namely frequently asked questions (FAQs), User Guide, vulnerability reports, Safety Guarantee, Usage Rules, and others. Furthermore, this section highlights the social construction process in Bukalapak, which eventually shapes complementary food product assessments and influences consumer decisions in buying goods at the price offered.

Embeddedness: Economic actions in digital-social networks

Three subjects or entities in the online marketplace involved in economic actions are buyers (in the ongoing process of transactions), digital-social contexts/structures that consist of the reputation system and products or stores, and application users who are not directly involved in buying and selling transaction process. These three parties, as argued by Granovetter, are the networks in which digital-social marketplace activities are constructed. The relationships and the positions of these three subjects are depicted in Figure 3.

Figure 3.

Digital-social networks.

In a digital-social context, buyers interact during the transaction process and act rationally based on their needs for the products and trust in the reputation attributed to the structure, coined by Granovetter as an ongoing system of social relations. The records of product and store reputation become pre-existing social ties, which are the record of digital footprints of interactions in the form of feedback from buyers who have completed previous transactions, what might be called the historical and structural embeddedness of relations (Granovetter, 1985). In addition, pre-existing social ties can function to overcome difficulties in building trust in conducting transactions with strangers in the online marketplace because, as emphasized by Resnick et al. (2000), ‘strangers lack known past histories or the prospects of future interaction’. Thus, it can be said that the actions of buyers as actors are not passive or regardless of the context of digital-social construction, ‘ . . . nor do they adhere slavishly to a script written for them . . .’ (Granovetter, 1985).

Figure 4 shows 11 core keywords that appear in the reputation system as represented by 5131 comments on MPASI products at Bukalapak, retrieved on 7 November 2022 between 7.16 and 7.20 p.m. of Western Indonesian Time (WIB). Granovetter’s perspective suggests that the online marketplace social digital footprints are a result of personal relations and network structures between individuals and institutions during buying and selling transactions. Positive words such as ‘thank you’, ‘satisfied’, ‘like’, ‘recommended’, ‘repeat purchase’, ‘thank God’, ‘friendly’, ‘sorry’, and ‘bonus’ have a great frequency. They can create positive meanings and nuances for users who read the comments prior to deciding to buy a product, thus building trust and functioning to discourage malfeasance.

Figure 4.

Word frequencies based on social embeddedness.

On the contrary, the negative word ‘disappointing’ also appears, albeit insignificant (0.008%) and thus cannot damage reputation and destroy trust. Thus, in this analysis stage, the reputation system is positioned in the context of the social structure of a market arena concerning its role in building reputation and trust amid anonymous transactions rather than its technical function, namely how this system is arranged algorithmically to provide a large advantage for sellers in online marketplace, as corroborated by Aperjis et al. (2010).

Furthermore, buyers can immediately establish a reputation and trust by providing feedback on their experience, indicating ‘satisfaction’ or ‘dissatisfaction’ with the received products. The ease of providing feedback motivates buyers to engage in digital interaction networks, leading to an increase in recorded footprints. These footprints serve as a reference for users to ‘generalize trust’ and make decisions regarding product selection and transactions. This highlights the embeddedness of users’ economic actions within institutions, in which users are neither over-socialized nor under-socialized, as they require information when performing economic actions in the digital-social context, which is a pre-existing digital-social context.

Building the standardized value the online marketplace

Figure 5 displays 26 core keywords with a total of 11,819 mentions based on material valuation, collected during the data scraping process from the description column of 1988 MPASI product IDs in the aforementioned timeframe. In this column, the dominant repeated words compared to other words are ‘flavor’, vitamin’, ‘ingredients’, and ‘contain’ that do not directly refer to the physical characteristics of the product, rendering this column heavy with nuances and meanings regarding the standardized value; thus, it can be said that for sellers, this column is the place where the material and standardized value of products are constructed and introduced.

Figure 5.

Word frequencies based on standardized value.

The description column heavily emphasizes the nuances and meanings related to functional and technical qualities, with repetitive use of words such as ‘grow’, ‘healthy’, ‘stimulus’, ‘train’, ‘function’, and ‘learning’, which occur a total of 1647 times. Sellers prioritize functional and technical qualities to address specific problems related to baby development. Providing information on these qualities is crucial for building a standardized value for MPASI products, as seen in the product description ID 3z92zbe: ‘Promina Puffs are suitable for babies aged 8 months and above. The texture melts easily in the mouth with the right size to train your little ones to learn to pinch’.

Observed from the perspective of the platforms, the provision of this column aims to help reduce the problem of asymmetric information and uncertainty between sellers and buyers. It is crucial since transactions in online marketplace transpire anonymously not only between sellers and buyers but also between buyers and products they want to purchase. In addition, the ‘form’ of standardized value in online marketplace is limited to the ‘conception’ and ‘description’ as buyers are unable to directly access the physical conditions of the product, in contrast to the idea of Beckert (2019) which emphasizes the material characteristics that are accessible in the market prior to the transactions, such as the size and materials used.

In other words, the difficulty in determining the actual material value of a product in the online marketplace is much higher than in the conventional market-based ‘Market from Meaning’ or ‘Lemon model’ where buyers can at least directly conduct physical observation on commodities. Therefore, to overcome fraud in transactions, Bukalapak provides another system, namely Safety Guarantee, in which buyers do not directly pay for the products to the seller, but through the Bukalapak Payment System instead. The money will be returned to buyers if the products are not delivered according to the description provided or if it exceeds the time limit.

Digital-social interactions: Constructing the symbolic value

Figure 6 depicts the economic actions of buyers through frequent words used in the comment column of a product, which represent the valuation of anonymously purchased products. This accumulation of words is a form of mutual observation by Bukalapak users on a product, which reflects a subjective interpretation of quality assessment (Beckert, 2019) and can be referred to as the process of constructing symbolic value since it contains meanings and nuances that are not materially attached to the product. Buyers express these meanings and nuances as a form of a digital-social interaction, in which the frequency of words signifies the relevance of the form of symbolic value containing reputation and trust, functioning to generate confidence in the quality of MPASI products sold online and thus reducing the problem of asymmetric information and market uncertainty.

Figure 6.

Word frequencies based on value construction.

Moreover, in the design of the Bukalapak platform, feedback as the symbolic value is recorded and accumulated in the ‘Product Review’ section, displaying the percentage of Stars from previous buyers of the product, which can serve as a tool or object of claims for the validity of reputation and trust in the product. As presented in Figure 7, the accumulated percentage of ‘satisfied customers’ will become ‘ . . . status [that] reflects symbolic capital’ (Beckert, 2019), which is of great value to products and stores. This record can be seen directly on the product display along with buyer comments, rendering it quite easy for application users to assess the symbolic value of the product they see.

Figure 7.

Recording and accumulation of feedback.

Thus, the accessibility of the symbolic value in online marketplaces is higher compared to conventional markets, as it is regulated by an algorithm and recorded as a digital footprint, available on the same page as the product. In contrast, in conventional markets, symbolic value is in the form of intersubjective-discursive trust that cannot be accessed directly and individually, as stated by Beckert (2019). To put it simply, in online marketplaces, symbolic value is formed between users through a system provided by the platform, which can be measured and accessed individually. In contrast, in conventional markets, symbolic value is formed through social interactions, cannot be measured, and can only be accessed through social interactions.

Without the easily, mutually, and infinitely observable feedback feature and comment column, the value and price of the product can become ‘indeterminate’. This is because users cannot interpret the value of products that have been provided by other buyers as judgment material for themselves. Therefore, judgments about the symbolic value of products in the online marketplace are influenced by the accumulation of comments from previous anonymous buyers. It contradicts the idea of Podolny (1994) regarding the construction of symbolic value in the conventional market, whose fluctuations depend on the social status and rank of the actors providing the product appraisal.

Cumulatively, the words that appear in the product comments can be divided into positive and negative comments. Positive comments are 8830 times more frequent than negative ones (which only repeat ‘dented’ and ‘damaged’ 47 times). These comments represent a process of staking validity claims on product quality (Beckert, 2019), either forming or damaging confidence in the product. Furthermore, this opportunity to build quality claims is frequently exploited by competitors to damage product value, namely by buying a product and then deliberately making negative comments, for example, the ‘product does not match the description’ and low rating. In certain situations, users can refer to the percentage of accumulated ratings and feedback to assess the actual product quality.

WTP: Based on symbolic value judgment constructed in digital-social interactions

Figure 8 shows the four actions in the digital-social online marketplace structure which is the arena where the iterative process of digital-social construction occurs. The first action occurs when buyers open the application and can immediately access the products they are searching for as well as the reputation system which is an accumulation of pre-existing digital-social ties containing symbolic value. This structure is essential for online marketplace – referred to as anonymous online markets (Serpe, 2021) where buyers cannot directly and objectively access the quality of the products sold – to overcome the significant issue of information and quality uncertainty that can lead to market failure, as buyers are only willing to pay for average quality (Beckert, 2019). In other words, although information related to material quality such as product specifications, materials, and functions is clearly stated in the product description, buyers remain unable to access and ensure the validity of the information directly, hence their need for a basic value of trust and a sense of security from this structure to assure their trust and WTP products at a certain price, which represents the second action.

Figure 8.

Map of digital-social structure.

Figure 9 displays the close relationship between the second action, namely WTP, with the symbolic value successfully perceived by buyers from the pre-existing digital-social ties. In addition, it also shows the top 3 of 10 brands with the highest total sales and the most positive ratings. This finding is an indication that buyers tend to choose brands with high symbolic value, which is shown in the keywords ‘regular customer’, ‘recommended’, and ‘repeat purchase’, as presented in Figure 4.

Figure 9.

Total sales and positive rating.

Furthermore, the three brands with the highest sales are well-known brands that already have a brand concept containing symbolic and functional features (Park et al., 1986; Sammut-Bonnici, 2015) constructed outside the online marketplace system. It shows that the acquisition of goods is not only related to use and exchange value, but also the symbolic value and the meaning of goods (Blue, 2017). Thus, the symbolic value formed in the reputation system in online marketplace is not only related to the construction of the symbolic value and meaning of the brand, but also provides intersubjective trust to buyers and users in the form of a safe guarantee for anonymous transactions.

On the contrary, although the MPASI brands of Promina and Milna have more positive ratings than Yummy Bites, both have lower sales results. It may be an indication of a possible bias in the reputation system, as stated by Tadelis (2016b) that a high positive percentage does not always accurately reflect buyer satisfaction. A possible bias can occur when sellers manipulate sales volume by buying their own products or giving positive ratings, which is a form of competition to build quality claims. It occurs because Bukalapak’s reputation system only allows reviews from successful buyers. Thus, bias in the reputation system may also occur within Bukalapak, not only within eBay or Taobao, as is revealed by Tadelis (2016b).

Furthermore, Bukalapak provides an opportunity for sellers to obtain the highest status as Super Sellers (see Figure 10) and/or Recommended Sellers with certain requirements, one of which is having a lapak (store) performance score of ⩾75. The seller’s status enables priority in product search, special filters, Super/Recommended Seller badges, and support from the Bukalapak team (e.g. inclusion in flash deal promos). This suggests that a high symbolic store value increases willingness to sell. On the contrary, Bukalapak also strictly penalizes fraudulent sellers, who manipulate information or content, or engage in fraud/suspected fraud.

Figure 10.

Seller with Super Seller and Recommended status.

Therefore, through its system and programs, Bukalapak can be said to be a digital-generated trust mechanism, which is highly interested in creating symbolic value for sellers by providing a secure marketplace, reducing uncertainty, and increasing buyers’ willingness to purchase (Beckert, 2019). This situation is in line with the idea of Staab (2019) regarding digital platforms in capitalism that attempt to become the market itself with the aim of controlling market activities and establishing exchange rules, which can lead to the formation of proprietary online marketplace by controlling all aspects of the platform, including its policies, features, and algorithms.

Conclusion and discussion

In this study, Bukalapak with its reputation system is positioned in the context of arenas that demand social interaction – instead of the technical function of digital technology – a place where digital-social networks are constructed among market actors (sellers, buyers, and users) in the context of a digital-social structure in the process of buying and selling transactions. This mediated interaction is the key to establish trust between anonymous actors; thus, the economic actions of the users can be said to be embedded in a reputation system, which is an ongoing system of social relations (Granovetter, 1985: 487). Therefore, the economic actions of the actors are neither over-socialized nor under-socialized, as users require information about reputation when performing economic actions in the digital-social context, which is a pre-existing digital-social context.

Study finds that the online marketplace’s product description column can help sellers introduce the standardized value of their products, including material and functional characteristics. However, in the online marketplace, accessing standardized values is more difficult as transactions transpire anonymously not only between sellers and buyers, but also between buyers and products as the products cannot be physically observed. Therefore, the standardized quality of products that is accessible to buyers in the online marketplace has a different form than the conventional market-based ‘Market from Meaning model’ (Beckert, 2019) or ‘Lemon model’ (Akerlof, 1970), in which the interactions can take place with ‘real human beings’, allowing consumers to form trust by touching, moving, and seeing the product from all sides (Umesh, 2018). In online marketplaces, standardized values are limited to material and technical descriptions rather than the actual characteristics themselves.

Therefore, the reputation system of the online marketplace serves to increase the trust of buyers that anonymous transactions can progress safely. The findings of the study reveal that social digital interactions can generate measurable symbolic value of products and stores as they are recorded and arranged by an algorithm in the form of percentages and can be directly and individually accessed by buyers, in addition to the products sold. Thus, the symbolic value in the online marketplace is different from that of the conventional market which is in the form of intersubjective-discursive trust and can only be accessed intersubjectively, as specified by Beckert (2019). Furthermore, as transactions and relationships in the online marketplace transpire anonymously, fluctuations in the symbolic value of products are not influenced by the social status and rank of the buyers, but by accumulated ratings and meanings. It is different from the conventional market in which the status and social position of the buyers play an important role in increasing the symbolic value of products (Podolny, 1994).

The findings also show that the symbolic value recorded in the reputation system as pre-existing digital-social ties becomes a tool or object for buyers to obtain judgments regarding product quality and store reputation which can then affect WTP. Therefore, the social digital structure, which allows anonymous market actors to interact, is significantly important to overcome the problem of asymmetric information and quality uncertainty to prevent the market from experiencing failure. This study of the economic sociology of the online marketplace analyzes digital-social relations that shape anonymous-based economic behavior, where reputation systems and programs play an important role as an arena for establishing trust in secure transactions.

Future studies need to focus on the construction of the symbolic meaning of a brand through mechanisms outside the reputation system, such as advertising, to observe whether brand reputation can influence buyer behavior in the online marketplace. In addition, it is also necessary to focus on the problem of bias that frequently arises in the reputation system to establish a system mechanism that can accurately measure the reputation of a store and a product.

Finally, this digital-social data analysis method based on conceptual frameworks that processes big data and employs Python Software and Google Data Studio provides a deeper understanding of online marketplace in the context of constructing digital-social interactions. At the same time, this research also answers the idea of Ignatow (2020) regarding the two values of theory for sociological research in the information age, namely (1) sociology of the digital, which refers to the use of established sociological theories and methods to analyze social phenomena that are influenced by information communication technology, and (2) digital and computational sociology, which refers to the use of computational technology to develop sociological research methods or to substantially revise established methodologies (Ignatow, 2020).

Footnotes

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was funded and supported by Master’s program scholarship of the Indonesian education scholarship, Lembaga Pengelola Dana Pendidikan (LPDP).

ORCID iDs

Ahmad Fauzi

Sudarsono Hardjosoekarto

Radhiatmoko Radhiatmoko

One Herwantoko

Darwan Darwan

Ewina Efriani Manik

Zainur Romli

Author biographies

Ahmad Fauzi is a student of master’s degree programme, and a member of Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. His research focuses on the economic sociology of digital and online marketplace with a mixed-methods digital research approach.

Sudarsono Hardjosoekarto is a Professor and currently the Coordinator of the Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. While carrying his duties as a lecturer since 1984, he was also appointed to hold positions in several posts at the Ministry of Home Affairs, as Director General and acting Governor in the 2000–2008 period, and as General Secretary of the Indonesian Regional Representative, in the 2013–2017 period. His research interests are sociology of market, sociology of organizations and sociology of disasters, with the application of a variety of digital and computational mixed-method approaches.

Radhiatmoko Radhiatmoko is a PhD graduate in Sociology, and currently a researcher at Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. His research interest focuses on Digital Research and Social Network Analysis (SNA).

One Herwantoko is a doctoral student and member of Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. Currently, he works as the Acting Head of Planning and Budgeting Section I, at the Planning Bureau of The Ministry of Manpower of The Republic of Indonesia. His area of research focuses on economic sociology, population and labour issues.

Darwan Darwan is an alumni of the Master degree programme in Sociology and currently an assistant researcher at Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. His research focuses on the sociology of market using a digital mixed-method research approach.

Ewina Efriani Manik is a student of master’s degree programme, and member of Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. Her research focuses on sociology of market using a digital research approach.

Zainur Romli is a student of master’s degree programme, and a member of Research Cluster ‘Economy, Organization and Society’, at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Indonesia. His research focuses on economic sociology, Small & Medium-Sized Enterprises (SMSE) development and rural communities.

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