What Are The Metrics To Track for eCommerce Companies?
eCommerce crash course by Yanjun Wang, CCO of Sea Limited
"Looking at GMV alone can be misleading for the business as a whole."
eCommerce crash course by Yanjun Wang, CCO of Sea Limited
Metrics to Track
When studying eCommerce business, we have to look at a range of metrics:
- Order number
- App downloads
- Active users
- Time spent in-app
- GMV
Problem when the GMV is the Only KPI
If a business solely focused on Gross Merchandise Value (GMV), the ecommerce company will focus on growing basket size with higher ticket goods.
These are usually standardized goods that are low margin and less competitive, examples:
- Virtual goods
- Electronics
- Wholesale items
Beyond GMV
It's easy to grow GMV, but it doesn't lead to a healthy eCommerce platform with the CORE CATEGORY Shopee focuses on:
- Fashion
- Health and beauty
- Home and living
- Baby products
Beyond GMV, we have to ask the next-level questions:
- What's the basket size?
- What's the order number?
- Are you growing GMV by growing basket size and skewing towards the core categories (stated above)?
- Are these sustainable, high-value & margin, recurring orders?
What Shopee Focuses On
Shopee is focusing on building its core category demand because:
- Recurring nature
- Charge higher take-rate
- Enables healthy eCommerce platform with diverse seller and user base.
Another important metric: time spent in-app.
Young users in SEA and LATAM are social-community-based native generation, native to mobile tech.
Users like to socialize, talk and engage with each other while doing their shopping transactions.
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