Beyond trust: value creation via social media business model for Chinese Daigou business of luxury products

Purpose This study aims to deepen the understanding of the social media business model (SMBM) by analyzing how Daigou creates value in the luxury sector through its unique business model (BM) perspective. Building on literature related to BMs and social media marketing, the authors argue that Daigou, as SMBM, generates value for both customers and sellers by leveraging social media platforms. Notably, the authors highlight the importance of Guanxi networks in value creation and add a novel perspective on leveraging social media for BMs in informal sectors. Design/methodology/approach The empirical findings are derived from multiple sources, including archival documents on the Daigou business, observation of Daigou sellers throughout the purchase stages and in-depth interviews (n = 20) with Daigou sellers. Findings The findings highlight the essential elements of the Daigou SMBM, offering new insights into how this model aligns with Amit and Zott’s (2001) four drivers of value creation in e-business. Specifically, the authors break value creation activities into prepurchase, purchase and postpurchase stages, providing a comprehensive understanding of how value is generated and captured at each stage. In addition, the authors find that the Chinese Guanxi networking is integral to facilitating value creation, particularly in trust-based interactions on social media platforms like WeChat. Originality/value The authors propose a new SMBM that combined with Daigou’s services to cultivate multiple Guanxi relationships, can significantly enhance value creation and capture within the SMBM, providing a more complete understanding of how informal channels can sustain value creation, delivery and capture. This approach highlights gaps and implications in current knowledge, leading us to conduct an in-depth case study on SMBM to clarify these dynamics and their strategic importance further.