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Thread: what's taobao GMV ?

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    what's taobao GMV ?

    Transaction volume on Taobao (gross merchandise volume or GMV) exceeded RMB200 billion (US$29 billion) in 2009. According to government statistics, Taobao’s GMV equaled approximately 1.4 percent of China's total retail trade in the first half of 2009. Taobao is the primary online shopping destination for the largest online population in the world**.

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    GMV is the total value of merchandise sold over a given period of time through a customer to customer exhange site. It is a measure of the growth of the business, or use of the site to sell merchandise owned by others. GMV is one the performance yardstick of an e-commerce site as the revenue of the business will be a function of gross merchandise sold and fees charged.

    One Analyst expects Taobao/Alipay to generate in excess of $50 billion in GMV in 2011 and can be the largest E-Commerce company globally in terms of GMV and number of active registered users by 2013.

    The analyst predicts that China E-Commerce market will reach $60 billion to $70 billion by the end of 2011 and Taobao has anywhere between 70 percent and 80 percent market share, translating into $42 billion to $56 billion in GMV for Taobao.
    With roughly 1.5 percent take rate, net revenue can be $630 million to $840 milion, the analyst added. Take rate is nothing but the amount a user pays to the website for taking up a particular service or offer. Take rate is used to measure newsletter subscriptions, downloadable materials such as ebooks and RSS subscriptions.

    "We believe that Taobao/Alipay can grow top line at 60 percent CAGR and bottom line at 100 percent to 120 percent CAGR for the next 3-4 years because of operating leverage but more importantly because of improving take rates," said Aggarwal, who added that both EBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN) are trading at much higher multiple due to higher take rate but lower growth rates.

    "If we apply 0.5x to 0.7x Price to GMV on 2011 mid-point GMV estimate of $50 billion, we reach a minimum of $25 billion valuation for Taobao/Alipay," the analyst said.

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