How to calculate market share: formula and examples

Market share is the percentage of a market's total sales that one company makes over a set period. To calculate market share, divide the company's sales by the total sales of the market for the same period, then multiply by 100.

The arithmetic is the easy part. The hard parts are deciding what counts as "the market" and finding competitors' numbers when they do not publish them. This page shows how to calculate market share both ways, then how to estimate it when the data is private.

The market share formula

There are two versions, and they answer different questions.

Revenue share = your revenue ÷ total market revenue × 100. This is the usual meaning, and the one analysts and investors quote.

Unit share = units you sold ÷ total units sold in the market × 100. Use it when prices vary a lot between competitors, or when you care about how many customers you reach rather than how much they spend.

Keep the period, the geography and the product definition identical on both sides of the division. A calendar-year revenue figure divided by a financial-year market total gives you a number, but not a market share.

How to calculate market share: a worked example

Say four companies sell standing desks in one country. These figures are hypothetical.

Your revenue share is $8m ÷ $40m × 100 = 20%.

Your unit share is 20,000 ÷ 80,000 × 100 = 25%.

The gap between those two numbers is information. A unit share above your revenue share means you sell more cheaply than average: your average price is $8m ÷ 20,000 = $400, against a market average of $40m ÷ 80,000 = $500. If your plan is to move upmarket, that gap is the number to watch.

Relative market share

Relative market share compares you with the biggest rival instead of the whole market. It is the share measure used in the Boston Consulting Group's growth-share matrix.

Relative market share = your share ÷ the largest competitor's share.

In the example, Company A has $16m ÷ $40m = 40%. Your relative share is 20% ÷ 40% = 0.5, so you are half the leader's size. For the leader, the comparison is with the next biggest firm: Company A's relative share is 40% ÷ 30% = 1.33.

Above 1.0 means you lead. It says more about scale than raw share does, because 20% means one thing when the leader holds 60% and something else when nobody holds more than 10%. That difference is what separates a market leader from a challenger, follower or nicher.

Defining the market is the real decision

Every market share figure depends on the denominator, and the denominator is a choice.

An independent coffee shop has a tiny share of coffee sold in the UK, a respectable share of coffee sold in its city, and perhaps the largest share of coffee sold within five minutes of the station. All three are correct. Only the last helps you decide anything, because it matches where customers actually choose between you and the alternatives.

The test: would a customer realistically consider every company in your total? If not, the market is drawn too wide. If customers regularly pick something you left out, it is drawn too narrow. A fixed competitive set is a good place to start.

How to find market share when competitors' revenue is private

Most small markets are full of private companies that publish nothing useful. In the UK, small companies can choose not to file a profit and loss account at Companies House (gov.uk), so turnover is often missing from the public record. In the US, private companies generally publish no financial statements at all.

So you estimate, from more than one direction. Finding a private company's revenue covers the digging. These proxies stand in for share when the digging comes up empty.

The arithmetic is the same as before. Say you run a dental practice with 340 Google reviews, and the four rivals in town have 610 between them. Your review share is 340 ÷ 950 × 100 = 35.8%.

Use at least two proxies and trust the answer when they agree. If review share says 36% and search share says 12%, one of them is measuring something other than sales, and working out which is usually worth more than either number.

Common mistakes

Drawing the market to flatter yourself. A narrow enough definition makes anyone the leader. Fix the definition before you see the result.

Mixing revenue and units. Your revenue over the market's unit count produces nonsense that still looks like a percentage.

Confusing points with percent. Going from 10% to 12% share is a 2 percentage point gain and a 20% increase. Say which you mean, because the second sounds far bigger.

Reporting the level, not the change. Share moves slowly. The direction over several periods is the signal.

Treating proxies as sales. Reviews, traffic and searches move with sales but are not sales. Label estimated shares as estimates.

Watching the proxies move

In most small markets, proper share data arrives once a year at best, if at all. Proxies move every week, which makes them the early warning: a competitor whose review count and organic traffic climb faster than yours is probably gaining share before any report says so. Figo records both for each tracked competitor every week, which is one way to keep that series going without a spreadsheet.