How Social Media Facilitate the Governance of the Underground Economy: The Case of Petty Smuggling in Macao SAR, China

Abstract This paper examines how social media platforms are utilized to solve the problem of goods-related scams by smugglers in Macao’s petty smuggling industry. By collecting primary data through 61 interviews, fieldwork in a petty smuggling hotspot between Macao and mainland China, and cyber-ethnography in two popular Chinese social media platforms Xiaohongshu and WeChat, this paper discovers that some traditional underground economy governance mechanisms such as reputation, hostage-taking, violence and third-party protection have been largely revamped into online background checking, digital ID information sharing, cyber violence and platform penalties. In addition, social media provide a new form of governance: real-time process monitoring. This study not only provides up-to-date empirical data on how petty smuggling takes place between Macao and mainland China but also enriches our understanding of how social media platforms could reshape the governance mechanisms in the underground economy in the digital era.