GMV (Gross Merchandise Value) is the total sales value of all goods or services transacted through a marketplace or platform in a given period, measured before deducting fees, returns, refunds, discounts or operating costs. It measures the size of the activity on a platform, not the money the platform itself earns.
Why it matters
Marketplaces such as ride-hailing apps, delivery platforms and online stores typically keep only a slice of each transaction. GMV shows how much commerce flows through the system and how fast it grows, while revenue shows what the company actually keeps. Investors and analysts watch both, and the ratio between them is often called the take rate.
Example
Orders placed on the platform: 10,000
Average basket: 500
GMV = 10,000 x 500 = 5,000,000
Platform commission (15%) = 750,000 revenueHere the platform reports 5 million of GMV but only 750,000 of revenue.
Common misconceptions
- GMV is not revenue or profit. Reporting it as if it were is misleading.
- Companies define it differently: some count cancelled or returned orders, some include shipping and taxes. Check the definition before comparing two businesses.
- Growing GMV with heavy discounts can mask weak unit economics.
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