Gross merchandise value

The total value of goods sold through a marketplace, before any deduction. It is not the platform's revenue.

A marketplace with ₹8,500 crore of gross merchandise value and a take rate of 8% earns ₹680 crore of net revenue.

Valuing a marketplace on gross merchandise value means valuing somebody else's sales. A platform can double this figure by subsidising the customer, and several Indian consumer internet companies did that while their contribution margin stayed negative, so the growth was bought and never earned. That's an expensive way to look big.

Definitions are elastic. Some companies include cancelled orders, some include returns, some include the value of goods sold by their own inventory arm alongside third-party sales.

Value the take and ignore the flow.

Gross merchandise value counts somebody else's sales.