How to size a market when the data does not exist

The number in the press release is usually a guess

Search for the size of almost any specific B2B category in a specific country and you will find a figure attributed to a research firm, repeated across a dozen articles, with no method attached. Frequently it is a regional number divided by population, or a global number apportioned by GDP. It is not evidence, and a board paper built on it inherits the error.

The alternative is not to give up on a number. It is to build one, from two directions, and take the disagreement between them seriously.

Top-down: start from what crosses the border

For any category that is imported, customs data is the most under-used source available. It records what actually moved: HS code, volume, declared value and country of origin, usually monthly, usually free.

It gives you import volume directly, an average unit value you can sanity-check against retail observation, and the origin mix — which tells you who you are really competing with. Where domestic production exists it has to be added, usually from industry-association or statistics-office output data.

The limits are real and should be stated: HS codes are often broader than your product, so the figure includes adjacent items; transfer pricing distorts declared values; and re-export hubs inflate apparent demand. The UAE is a good example — a significant share of what enters is destined for elsewhere in the region.

Bottom-up: start from the buying points

The second estimate is built from structure rather than flow. How many buying points exist, and how much does each buy?

1. Count the buying points. Not the population — the actual units that purchase: hotels above a size, hospitals, factories with a given process, retail outlets of a given format, construction firms above a revenue threshold. These counts exist in statistics offices, trade registries and association directories more often than people expect.
2. Establish consumption per point. This is where conversations with channel participants beat any desk source. A distributor who supplies forty hotels knows what a hotel of that size consumes per month.
3. Apply penetration. Not every buying point uses your category. The proportion that does is the assumption most likely to be wrong, so it should be stated explicitly and tested.
4. Multiply, and record every assumption so the estimate can be revised when one of them turns out to be wrong.

Reconcile, and treat the gap as the finding

The two estimates will not match. A gap inside a factor of two is normal and you can work with the range. A gap of an order of magnitude means an assumption is badly wrong, and finding out which one is usually worth more than the number itself.

Common causes: the HS code covers far more than your product; a large share of imports is re-exported; the penetration assumption is far too generous; or the category is substantially served by domestic production nobody counted.

Size what you could actually win

Total market size is the least useful of the three numbers. What a plan needs is the addressable and the winnable:

• Total market — everything consumed in the category.
• Addressable — the part your product can actually serve, once specification, price band, channel access and regulatory eligibility are applied. This is often a small fraction of the total.
• Realistically winnable — the share of the addressable market a new entrant with your cost base, your partner and your marketing budget could take in two or three years. Being honest here is what separates a plan from a wish.

State your confidence

An estimate without a confidence level invites a reader to treat it as fact. Say which parts are solid — customs data is solid — and which are directional, such as a penetration rate derived from four conversations. A number presented with its uncertainty is more useful, not less, because the reader knows which parts of the plan to hedge.

Where this fits

This is stage two of the sequence in our international market entry guide, and it is what our market research and intelligence service does at the start of most engagements. For investment teams the same method underpins commercial due diligence.