Reading Chinese ecommerce reports: reconcile GMV, revenue, settlement and profit

Identify the question behind each measure

There is no universal GMV definition independent of the platform and report. For example, the official Qianchuan paid-GMV guide describes exclusions for particular abnormal or very quickly refunded orders in that advertising product, with different effective dates and no historical restatement. It does not establish the definition of a Tmall, Xiaohongshu or every Douyin report.

Keep the original Chinese field name beside the English explanation, export date, filters and applicable rule version. Shareholders in the United States, Australia or Russia do not establish that a company in that country operates the store. First identify the contracting seller and recipient of funds.

Bridge one order cohort to revenue and settlement

The following RMB example is hypothetical, not a customer case. Assume one entity, one store and 100 paid orders, each with RMB 100 of merchandise consideration plus RMB 5 of illustrative VAT. These are assumed amounts, not a tax rate or tax conclusion for your business. All payments, cancellations and returns are resolved in the same observation period, with no other discounts, subsidies, opening balances or unresolved returns. Assume that control of delivered goods meets this entity's applicable recognition conditions.

Ten paid orders are cancelled and fully refunded before delivery; another ten are delivered, returned and fully refunded. Eighty are retained. Under these assumptions:

10,500 − 2,100 = 8,400; 8,400 − 450 = 7,950; 7,950 = 7,300 + 650. Each step requires the real order, refund, settlement and bank evidence. The starting payment total is a transaction-scale measure chosen for this illustration; it is not asserted to be any platform's actual GMV.

On the stated assumptions, the RMB 8,000 merchandise consideration for the retained orders is recognised revenue in this example. The illustrative RMB 400 VAT is separate. Real returns, expected returns, tax, charges and timing can differ. Where China's Accounting Standard for Business Enterprises No. 14 on revenue applies, assess the actual performance, transfer of control and return terms; entities under another framework need their own assessment.

Move from revenue to a defined contribution

Assume product cost of RMB 40 per item and that all ten returned items are inspected and returned to saleable inventory without other loss. The 80 retained items therefore represent RMB 3,200 of product cost. Add RMB 600 of direct advertising and RMB 300 of fulfilment expense. For this example, the RMB 450 platform charge and those other amounts have already been determined as the entity's expenses after considering any actual deductible tax; the amounts do not overlap.

The contribution after these selected expenses is 8,000 − 3,200 − 450 − 600 − 300 = RMB 3,450. It excludes payroll, rent, shared overhead, financing and other relevant taxes and costs. It is not the company's net profit. The marketplace has already deducted the RMB 450 in the settlement bridge: do not subtract the same charge again when starting from the RMB 7,950 cash settlement.

The RMB 7,300 bank receipt is also not the RMB 3,450 contribution. The first comes from a VAT-inclusive settlement and excludes RMB 650 still in transit; the second starts with revenue and deducts the stated costs. A real bank statement can combine other settlement batches, deposits, loans or tax payments. Identify them separately instead of inventing an unexplained balancing item.

How to connect actual reports

1. Set the scope. Record the store, selling entity, currency, cohort and the date field in each report. Keep the original order and actual transaction dates for cross-period refunds and withdrawals; the single-period example is a simplification.
2. Match orders and after-sales activity. Connect payment, cancellation, fulfilment, refunds and inspected returns using order or item identifiers. Do not deduct a refund again from a figure already net of it.
3. Bridge accounting and settlement separately. Connect revenue recognition, tax, cost and supporting records to the books; then connect marketplace charges, restricted balances, withdrawals and bank records to cash. The same charge may appear in a statement and a fee report.
4. Keep unresolved items visible. A refund without its order, shared advertising without a reliable allocation or a pending withdrawal remains an open item, with its amount, possible cause and evidence needed.

Information reported by Chinese platforms to tax authorities has its own definitions. State Taxation Administration Announcement No. 15 of 2025 specifies gross income, refunds and net income for platform reporting. This management bridge does not establish what a platform actually submitted, and bank receipts should not automatically be treated as taxable revenue. Intercompany and overseas obligations require separate jurisdiction- and period-specific review.

CaiGeek is an AI financial assistant for small and medium-sized businesses. Explore the business and profit analysis example, continue with platform-reported income and bank reconciliation, or contact CaiGeek about the reports you need to explain and the records still missing. The example illustrates an approach; it is not a completed accounting assessment for your company.

Public sources checked on 6 November 2026. Verify the platform field definitions, accounting framework, VAT and entity conditions for the actual transaction and period.