Wednesday, 16 June 2021 01:49

Fake online reviews account for $1.2 billion of e-commerce sales in Australia this year: study Featured

By Staff Writer

Fake online reviews will be responsible for $1.2 billion of Australian ecommerce purchases made in 2021, according to newly published economic study.

According to the study by global customer acquisition security provider CHEQ and the University of Baltimore, both legitimate and fake online reviews will influence US$22.8 billion (A$29.4 billion) of Australian ecommerce spend in 2021 with 89% of consumers now relying on consumer reviews to buy online.

Using official figures and analysis of the world's leading ecommerce and review sites, CHEQ says the study reveals that 4% of all reviews posted are fake - creating A$1.2 billion - or US$900 million -  in sales directly influenced by fake reviews.

Globally the study finds that the direct influence of fake online reviews on global online spending will hit US$152 billion.

CHEQ says that online reviews will directly impact e-commerce sales in other countries as follows:

  • US $28 billion
  • Japan $6.4 billion
  • UK $5 billion
  • Canada $2.3 billion

Alongside the direct economic costs of fake online reviews, the report also reveals the growing price paid by businesses and e-commerce sites to counter a rising tide of fake reviews including competitor and bot attacks.

Cheq says this also includes widespread "indirect costs" faced by businesses including fast-rising court enforcement, corporate time, and the long-term lack of trust hurting future buying decisions.

The report also warns that although fake reviews are commonly done by humans, bot-filled reviews have enjoyed a resurgence on leading e-commerce sites. 

Economist Professor Roberto Cavazos - who was commissioned by CHEQ to undertake the study with the University of Baltimore Merrick School of Business - said: “Given the size of the market, the ease of entry and the immediate economic benefits, bad actors remain highly incentivized to engage in fake reviews”.

“This complex market is adversely influencing our purchases, causing significant economic detriment, creating real revenue losses for businesses, and severely diminishing trust in online purchasing."

CHEQ founder and CEO Guy Tytunovich added: "Core to tackling this challenge is the continuing efforts of leading e-commerce players and online platforms, alongside wider innovation and cybersecurity checks to ensure sophisticated detection of the most extreme attacks”.

“It has become a clear economic necessity to act against fake online reviews and further diminish the reach of bad actors undermining online buying decisions."

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