Trust fraud: A crucial challenge for China's e-commerce market

Currently, China’s e-commerce market is growing at an unprecedented pace, however, it is faced with many challenges, among which the trust fraud problem is the biggest issue. In this article, we use Taobao as an example and conduct a thorough investigation of the trust fraud phenomenon in China’s e-commerce market. We present the development history of trust fraud, summarize its unique characteristics, and explore the reasons why so many sellers commit fraud. We further propose a dynamic time decay trust model that aims to deter trust fraud by raising its cost and promote the growth of small and medium-sized sellers. The model utilizes detailed seller ratings as the data source, and incorporates a transaction amount weight, a time decay coefficient, and three trust factors in the calculation of trust. We test the model on real transaction data from Taobao, and the experimental results verify its effectiveness. Our proposed trust model yields a practical approach to online trust management not only in the Taobao market but also for other e-commerce platforms. 2012 Elsevier B.V. All rights reserved.