When social media goes offline, sales take a hit

Online marketplaces have become a popular way for individuals to sell goods, such as second-hand items. A new study shows that social media plays a crucial role in boosting sales on these platforms.

The study, whose first author is Asst Prof Jack Tong from NTU’s Nanyang Business School, analysed over 186,000 transactions from 9,300 sellers for 20 days on Xianyu, China’s biggest online consumer-to-consumer marketplace.

The researchers looked at how sales were affected after Fishpond, a social media channel hosted directly on Xianyu, was shuttered following government concerns over illegal content on the channel.

After the shutdown, sellers on the channel saw their daily revenue fall by 11.4%. Revenue from repeat customers dropped by 6.7%, while revenue from new customers declined by 1.9%. Compared to more seasoned sellers, newer sellers were more badly affected by the social media channel’s closure.

“Collectively, these results confirm our expectation that using social media channels helps sellers earn the trust of peer buyers through the accumulation of social capital,” says Asst Prof Tong.

“Removing the social media channel caused more harm to the sellers who were expected to benefit most from using it.”

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Read more about the study, “Individual sellers’ social media participation and sales performance in peer-to-peer marketplaces: evidence from a quasi-natural experiment”, published in Production and Operations Management (2025), DOI: 10.1177/10591478241302768.

The article appeared first in NTU's research & innovation magazine Pushing Frontiers (issue #26, May 2026).