The Role of Perceived Risk in Shaping Trust through Influencer-Based Social Media Promotion: Evidence from Generation Z in Pakistan

Abstract

This study explores the influence of influencer-based social media promotion (SMIP) on consumer trust (TRT), with perceived risk (PR) acting as a moderating factor. As e-commerce continues to grow in Pakistan, especially among the digitally native Generation Z, trust becomes a crucial component in online purchasing decisions. Social media influencers, through their credibility and relatability, play a significant role in shaping consumer perceptions and reducing skepticism in the virtual marketplace. The research draws upon the Source Credibility Model and Risk Theory to examine how influencer attributes such as trustworthiness, expertise, and content quality foster trust in consumers. The study also investigates how various dimensions of perceived risk—financial, product, privacy, delivery, and time—alter this relationship. It hypothesizes that SMIP positively impacts trust and that perceived risk moderates this association. A quantitative research methodology was employed, involving 611 respondents aged 12 to 27 who are active users of social media platforms like Instagram, TikTok, and YouTube. Structural Equation Modeling (SEM) using SmartPLS 4 validated the proposed relationships. Findings confirm a strong positive effect of SMIP on trust and a significant negative moderating effect of perceived risk, indicating that higher perceived risks weaken the trust-building capacity of influencer promotions. This research contributes to the limited literature on influencer marketing in emerging markets and highlights the dual importance of content authenticity and risk management in building digital trust. Marketers are advised to collaborate with culturally aligned influencers and adopt transparent communication strategies to reduce consumer hesitation. The study emphasizes that while influencers can effectively build trust, managing perceived risk is essential to fully realize the benefits of influencer-driven campaigns in online commerce.