In company reports, retailers, you can often see messages about the growth of the GMV indicator over the period. Let's figure it out, what is it and why is it needed.
GMV indicator (Gross Merchandise Value or gross value of a product) - the total cost of goods, sold on the trading platform for a certain period of time, excluding returns, exchange and discounts.
GMV has recently become especially popular due to the development of the e-commerce direction. The indicator is used by non-food retailers, developing along the path of the marketplace.
Marketplace - trading platform, where the goods and services of many sellers are sold. Marketplaces earn commissions from transactions and services for sellers.
In their reports, the GMV indicator is published:
– Ozone
– Yandex
– M.Video
– Child's world
– Shoes of Russia.
GMV reflects activity on the trading floor - the higher the indicator, the higher the income is expected.
Companies can present their variations of the GMV score, but overall they are quite similar. Ozone in press releases and presentations gives the GMV indicator, including services, which represents the total value of orders, processed through the platform, as well as income from services for buyers and sellers, provided by the operating segment Ozon.ru, as well as tax value added minus discounts, refunds and cancellations.
M Video reveals GMV as retail purchases, paid and delivered online orders, paid supplies to legal entities from warehouses. The indicator includes sales of goods and services, which may be owned by a company or agents. GMV includes VAT, but does not include returns and discounts, offered to clients for the reporting period.
In view Children's world GMV includes purchases in retail stores and goods and services sold through the website and mobile app, which can be own and agency. GMV includes value added tax, net of discounts, provided to buyers, as well as less returns and canceled orders, committed during the reporting period.
GMV is not revenue
One of the most important points: GMV does not match revenue, but these indicators are related.
In a simplified form, the marketplace's revenue corresponds to the GMV indicator, multiplied by the sales commission, that is, that money, which the company receives from turnover. In this case, income can be added here, which the company generates when providing fulfillment services (order fulfillment), as well as proceeds from the sale of own goods. In this way, revenue is almost always less than GMV.
For instance, GMV Ozon indicator for the second quarter 2021 G. made up 89 RUB billion. with proceeds 37 RUB billion. Ratio of revenue to GMV for the first half of the year 2021 G. Russian public companies had the following.
Ozon and Yandex.Market have the smallest share of revenue in GMV due to the specifics of their work. Marketplaces offer a wide range of partner products, while the rest of the companies in the selection are more inclined towards retail in a classic form, selling the lion's share of their own goods.
The peculiarity of GMV is, that this indicator is growing faster than revenue. This is due to the fact, that companies are gradually increasing the share of sales of third-party products on marketplaces, which have a significant impact on GMV and only marginally on revenue.
In this way, one might say, that GMV reflects the success of the marketplace in terms of popularity with sellers and buyers, trade turnover. The higher the indicator, the greater the amount of commissions and income from services a trading platform can receive. Revenue is those income, which fall on the company and directly affect its financial results.
Resume
• GMV is the aggregate of the marketplace's trade turnover for the period excluding returns, Exchanges, Discounts.
• The indicator reflects the activity of trading on the site. The higher the activity, the higher commission income from turnover.
• GMV does not match revenue.
