The online retailers industry consists of companies that sell goods and services via the internet through their website and/or mobile apps. Some of these companies are integrated online retailers that offer a diversified product portfolio across categories, whereas others are focused on specific products such as apparel and accessories, footwear, groceries, personal care, furniture and home decor, or electronics. Below is current consensus forecast data on unit economics such as gross merchandise value (GMV), third-party take rate and active customers; financials, including total e-commerce revenue and operating income; and key ratios, such as operating margin and return on average equity. These key online retailer metrics aid market participants in identifying online retail industry trends and future performance of online retailers, such as Alibaba, Amazon, JD.com, eBay and Etsy.
What are the most important online retailer KPIs?
Key performance indicators (KPIs) are the most important business metrics for a particular industry and are where investors should look to find an investment edge. When understanding market expectations for the online retail industry, whether at a company or industry level, here are some of the online retailer KPIs to consider:
- Gross Merchandise Value (GMV)
- Total First Party Revenue
- Total Third Party Revenue
- Active Customers
- Number of Orders
- Order Per Active Customer
- Third Party Take Rate
- Average Basket Size (Abs)
- GMV Per Active Customer
What questions do these key online retailer metrics answer?
With Visible Alpha’s online retailer forecast data, you can discover:
- Which online retailer is expected to have the highest gross merchandise value (GMV) in the next year?
- Which online retailer commands the highest take rate from its third-party sellers? How is the take rate by the top online retailers expected to change in the next two years?
- Which online retailer has the highest active customer base?
- Which online retailer generates the highest revenue from its e-commerce platform?
- What are the biggest online retailers in terms of revenue?
How can this data be used?
By opening up forecast data on key online retailer KPIs, Visible Alpha is enabling institutional investors, retail investors, business reporters, students and more to quantify and compare market expectations for companies across the online retail industry.
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First-party operations involve a company that purchases inventory from a manufacturer or wholesalers, stocks the inventory, and sells and ships the goods directly to the end customer. In 1P operations, the company has ownership rights and may sell the products under its own label and price.
Third-party operations involve a company that provides a marketplace to suppliers to list and sell their goods or services and charges a commission fee based on a percentage of the gross merchandise value.
Platform revenue is the core revenue earned from the sale of products/services via a retailer’s online platforms, mainly its website or app. The value is generally a sum of first and third-party revenue and may include part of shipping revenue as well.
Fulfillment/shipping revenue is the revenue generated by charging fulfillment or shipping fees for orders to customers.
Digital Advertising Revenue
Digital advertising revenue is the revenue generated from providing advertising or marketing services such as performance marketing campaigns, placement of banners on the retailer’s online platform, promotional listings and so on.
Gross Merchandise Value (GMV)
Gross merchandise value (GMV) is the overall gross transacted value of goods/services purchased by customers via a retailer’s online platform. The value is inclusive of shipping charges unless otherwise stated and taxes such as VAT.
Take rate is the percentage charged on GMV to a retailer’s sellers. It generally includes commission fees and shipping fees charged when the company acts as the shipping provider and other seller services. Take rate could be on a blended basis or just a 3P basis.
Active customers are consumers who have made a purchase from a retailer’s online platform in the last 12 months.
Number of Orders
Number of orders is the total number of orders placed by consumers on a retailer’s online platform in a given period, inclusive of gross returns and net cancellations.
Orders Per Active Customer
Orders per active customer is calculated as the number of orders divided by active customers. This metric is indicative of how frequently a customer is likely to place an order in a given period.
Average Basket Size
Average basket size refers to the GMV per order. It is the average value of all orders placed on the retailer’s online platform in a given period.
GMV Per Active Customer
GMV per active customer is the GMV divided by active customers for a given period. It indicates the gross transacted value of goods/services attributable to each customer.
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