Gross Transaction Value

Definition

Gross Transaction Value (GTV) refers to the total amount of all transactions conducted through a platform or marketplace over a certain period. This includes the sales of all goods and services, without deducting any returns, order cancellations, or other fees. GTV is an important metric for measuring the overall transaction activity and business scale of a platform or marketplace, but it does not directly reflect the platform's net income or profit.

Origin

The concept of Gross Transaction Value developed with the rise of e-commerce and online platforms. As more transactions occur online, GTV has become a key indicator of a platform's success.

Categories and Features

GTV is typically used by intermediary platforms like Meituan and Beike. These platforms use GTV to demonstrate their market influence and business scale. The advantage of GTV is that it provides a comprehensive view of transaction activity, but its disadvantage is that it does not directly reflect profitability.

Case Studies

Meituan, one of China's largest lifestyle service platforms, achieved a GTV of 457 billion RMB in 2020, showcasing its strong market position in dining, delivery, and travel sectors. Beike, on the other hand, demonstrated its influence in the real estate market through property transactions on its platform, with a GTV exceeding 3 trillion RMB in 2021.

Common Issues

Investors often misunderstand GTV as net income or profit, but in reality, GTV is merely the total transaction amount without deducting any fees or returns. Another common issue is how to relate GTV to a platform's profitability, which requires analysis in conjunction with other financial metrics.