Is Alibaba cooking the Single's Day books? - Paul Gillis

Paul Gillis

China's e-commerce giant booked another record during its Single's Day in 2017. But what figures is the company actually reporting? Beida accounting professor Paul Gillis dives into the figures at his Chinaaccountingblog.

Paul Gillis:

Alibaba had another spectacular singles day, reporting US$25.3 billion of gross merchandise volume settled through Alipay. Business Insider reports that this nearly doubled the $12.8 billion that US retailers sold between Thanksgiving and Cyber Monday last year. 

"More than US$25 billion of GMV in one day is not just a sales figure," said Daniel Zhang, Chief Executive Officer of Alibaba Group. "It represents the aspiration for quality consumption of the Chinese consumer, and it reflects how merchants and consumers alike have now fully embraced the integration of online and offline retail." 

Actually, Zhang is wrong. GMV is not at all a sales figure (although it may well represent the aspirations of the Chinese consumer).  Alibaba does not report GMV as revenue (or sales), Instead Alibaba reports the transaction fees it charges to sellers.  In its fiscal year 2017, Alibaba reported 114 billion RMB of revenue on GMV of 3.8 trillion RMB. 

Analysts love GMV, which they believe gives a more meaningful view as to the volume of business going through the platform. A major problem is that GMV is not a defined accounting term, and the numbers are unaudited.

More at the Chinaaccountingblog.

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