How to Calculate Market Share and Find New Growth Paths

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In the traditional sense, market share is always about sales.

So if you Google “market share definition,” you’ll get something like this:

"Market share is the percentage of total sales free email database lists south africa in an industry generated by a particular company." - Investopedia

Essentially, if you operate in a $1 billion market and your annual revenue is $100,000,000, you have a 10% market share.

But online may not be just about sales. In the case of Facebook, for example (this is what the court highlighted as a point of criticism), the main service it provides—social networking—is actually free. The dollars it earns through advertising are part of a different market, that of online advertising.

So, for online businesses you can also consider active users, traffic and other criteria, instead of just considering sales.

Whatever the criteria used, it is important to keep in mind that market share is never a constant number. It is subject to change, which is why when we talk about market share we always tend to indicate the specific time period - quarterly or annual statistics.



How is market share calculated?
There are a few pretty popular ways to calculate market share:

The classic market share formula is based on total industry sales.
The customer market share formula is customer-centric, so you need to know the total number of customers in your market.
The relative market share formula is based on the market shares of the major players in your industry.
Online, however, sales and customers can easily be replaced by traffic, as previous figures can be difficult to know unless you are dealing with a market made up of public companies.