1 Potential market size
The same product has different market sizes for different consumer groups. For example, a product that meets the needs of pregnant women aged 25 to 40 has a very large market size. However, a product that meets the needs of pregnant women aged 25 to 40 who like punk rock style may have a much smaller market size.
DANESON is a company that sells high-end luxury toothpicks. We can imagine that the scene when a low-key, luxurious and connotative consumer buys this exquisite toothpick is very pleasing to the eye. However, the market size of this product is very narrow, which also limits the potential revenue. However, it is precisely because of this that companies like DANESON can capture this market more effectively and penetrate it more easily.
2 Market competition environment
When analyzing the product market, you must first confirm how many sellers are selling this product.
If you are the first seller of this product in the market, you need to do a lot of market research to determine whether there is a real market demand. Perhaps a “predecessor” has sold this product before, but withdrew because of the bad market. If there are competitors in the market, it proves that the market has been verified and can be sold; if there are already many sellers selling this product in the market, on the one hand, it means that the market has been verified, and on the other hand, it is necessary to think about how to distinguish brands and products in the red ocean market.
For example, Luxy Hair is not the first company to sell hair products online. In fact, when they entered four years ago, there were already many competitors. They knew that they had to make hair products with different characteristics. Luxy Hair chose to enter the social media marketing strategy. When others were still doing paid advertising, Luxy Hair decided to establish an exclusive marketing channel by spreading value and focusing on YouTube. This strategy was very effective. Luxy Hair stood out in the fiercely competitive market of the same type and quickly achieved a seven-figure e-commerce turnover and had millions of YouTube subscribers. Hair products operated by Luxy Hair.
3 Determine the product’s share in the local market
If a product is readily available in the local offline market, consumers may rarely buy it online. However, for a unique or hard-to-find product locally, consumers will be more inclined to buy it online.
For example, AULDEY is a high-end magic wand product with Audi Double Diamond, which is made based on the props in the TV series “Balala the Fairies” and is very popular among children. AULDEY high-end magic wand.
To determine the local market share of a product, the easiest way is to search “product + the name of the city” on Google.