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This statistic highlights Shopify’s Gross Merchandise Volume, reported on a quarterly basis from Q1 2016 onwards.
|Period||Q3 2020||Q2 2021||Q3 2021|
|GMV – Gross Merchandise Volume||$30.9||$42.2||$41.8|
(All figures are in billions)
Gross Merchandise Volume (“GMV”) is a key performance indicator that is used to assess a company’s performance, discover patterns that impact it, develop financial estimates, and make strategic choices.
GMV is the entire dollar value of orders processed through the platform in the quarter, including some applications and channels for whom a revenue-sharing agreement is in place This amount is reflected net of refunds while including duty, value-added taxes shipping and handling. The gross merchandise value (GMV) does not indicate the company’s revenue. The volume of GMV enabled by the platform, on the other hand, is a sign of merchant success and platform strength.
Beginning in March 2020, the firm saw continued robust growth in GMV, boosted by COVID-19 limitations, as consumers sought out methods to buy from a safe distance, employing eCommerce and taking advantage of options like curbside pickup and local delivery. During the fiscal year ending December 31, 2021, the pace continued, albeit at a slower momentum, as GMV grew compared to the previous fiscal year.
The corporation facilitated GMV of $175.4 billion and $119.6 billion for the years ending December 31, 2021 and 2020, respectively. It saw continuous rise in GMV in the year ending December 31, 2021, thanks to the tailwinds of the move to eCommerce, which was enhanced by COVID-19 in 2020.
Merchant Solutions: The amount of GMV enabled by the company’s platform is also inversely proportional to the company’s merchant services revenues. In the year ending December 31, 2021, compared to the same period in 2020, merchant solutions revenues climbed by 61.8%. This rise was due to sustained consumer trends following the COVID-induced eCommerce acceleration, an increase in the number of merchants utilizing our platform, an increase in currency conversion fees, improved pricing, and merchant adoption of Shopify Payments. These variables resulted in $31.9 billion more GMV being processed by Shopify Payments in 2021 compared to the same time in 2020, indicating a 59.2% increase year over year.
Seasonality: The degree of GMV that merchants facilitated through the platform is directionally connected with the company’s merchant solutions revenues. During the fourth quarter holiday season, merchants often handle more GMV. Consequently, their merchant solutions revenues in the fourth quarter are often higher than in prior quarters.
Transaction and loan losses: When comparing the year ended December 31, 2020 to the same period in 2019, transaction and loan losses increased by $26.7 million, or 106%, due to an increase of $18.8 million in losses related to Shopify Payments due to increased GMV processed through Shopify Payments, and a $7.9 million increase in losses related to Shopify Capital due to an expansion of the company’s programs as well as capital offerings.
Cost of Merchant Solutions: When compared to the same time in 2020, the cost of merchant solutions grew by 56.3% for the year ending December 31, 2021. Higher payment processing and interchange expenses as a result of increased GMV managed by Shopify Payments accounted for the majority of the increase.
Going forward, the company anticipates more normalized GMV growth against a more measured macro environment in comparison to 2021, but also that COVID-19-driven changes in merchant and consumer behavior in 2020 and 2021 will continue to expand the opportunities for entrepreneurship and digital commerce.
Revenues from merchant solutions are inversely proportional to merchants’ gross merchandise volume (GMV). The continuous influence of the COVID-19 pandemic, which has expedited the transition of shopping patterns to eCommerce, has resulted in a significant increase in merchant solutions revenue in recent quarters. The firm thinks that, as a consequence of the continuing expansion of merchant solutions offerings, their business will become more seasonal in the future, and that previous trends in the industry may not be a fair forecast of future performance.
Shopify is a leading provider of key internet infrastructure for commerce. The company boasts proven solutions to help you develop, establish, promote, and manage any size retail business. Shopify makes commerce easier for its users by delivering a platform and services that are built for reliability and ease of use. At the same time, it prioritizes providing a better shopping experience for customers worldwide. The company’s headquarters are located in Ottawa, Ontario.
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