When chatbots speak local: cultural understanding as a driver of value co-creation

Purpose: This study investigates how chatbot cultural understanding shapes consumer responses in online retail, focusing on perceived brand localness, consumer–brand identification and value co-creation behaviors. Guided by social identity theory, the study also examines the moderating role of consumer ethnocentrism.

Design/methodology/approach: This study employs a sequential mixed-methods design. Study 1 involves 15 semi-structured interviews that explore consumer perceptions of culturally intelligent chatbots. Study 2 tests the proposed model through a field study of 303 consumers recruited online and analyzed the data using structural equation modeling.

Findings: Chatbot cultural understanding enhances perceived brand localness, which leads to consumer–brand identification and, in turn, value co-creation behaviors. Consumer ethnocentrism does not moderate associations between chatbot cultural understanding and perceived brand localness and indirectly with value co-creation behaviors.

Originality/value: This research extends social identity theory to conversational AI, highlighting how culturally attuned chatbots act as cultural insiders that strengthen consumer identification and co-creation. It contributes to international marketing by demonstrating the role of cultural alignment in driving value co-creation in digital service encounters. These contributions are bounded to encounters in which international retailers actively localize chatbot communication, and the evidence is drawn from a single cross-border e-retailer operating in one collectivist emerging market.