Week in Review: Of GMV and e-commerce startups

By Karamjit Singh April 8, 2016

Garena says GMV is key metric, Carousell says not
MaGIC to announce Ashran Ghazi as CEO next week

Week in Review: Of GMV and e-commerce startups IT’S always interesting when you get fresh information from an established startup, and in South-East Asia, no startup is as established as Garena, especially from a revenue point.

Its group president Nicholas A. Nash tells Digital News Asia (DNA) that its 2015 gross revenue of US$300 million is recognised accounting revenue.

A more interesting data point is about the GMV (Gross Merchandise Value) for Shopee, its C2C (consumer-to-consumer) service. The startup gives US$350 million as the annualised GMV, without clearly specifying the base period.

But Nash has shared with DNA that Garena uses February’s GMV as the base period multiplied by 12 to get at the US$350 million, which puts February’s GMV at US$29.16 million, generated by 650,000 sellers.

With startups always so frustratingly vague about their numbers, it is refreshing for me that Garena has shared this data point. I am sure the more savvy DNA readers who have a strong interest in e-commerce, and especially marketplaces, will be able to make some interesting extrapolations from this data.

But I want to stay on GMV as Nash makes a forceful argument for the importance of GMV as a revenue data point for investors when trying to assign a value to an e-commerce startup.

Nash probably can speak about this with a lot more authority than most as he was an investor in technology companies for over a decade as a private equity investor with General Atlantic.

But then, on the other hand, you have the recently hired international vice president of Carousell Chai Jia Jih telling DNA that “we most probably will not look into using GMV to recognise revenue.”

His rationale being, “It’s very hard to understand GMV when people are trading goods through our platform, unless we’re part of the transaction like the e-commerce players, which use GMV a lot.”

Chai also does not see Shopee as a competitor even though they both offer C2C services. His take on Shopee? “Shopee plays a lot more in the e-commerce space where it is trying to sell you more things that you may or may not need.”

I think this clearly merits a more detailed comparison between the two.

Speaking of which, Ashran Ghazi, the incoming chief executive officer of the Malaysian Global Innovation & Creativity Centre (MaGIC) will know well that he will be compared with Cheryl Yeoh, although his wider mandate is to help entrepreneurs across the board and not just those in tech.

But the good thing is that Ashran is a serial entrepreneur who knows the pervasive role technology plays across all businesses, and I am sure technology will be an anchor of any programme he rolls out for MaGIC.

But challenges await him, as I spell out in my article, and he will need the support of the entire tech ecosystem in helping him achieve his wider mandate.

Have a restful weekend and a productive week ahead.

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