What direct and indirect competitors really mean
A direct competitor sells the same thing to the same audience, at a similar price level, in your district or city. The customer puts you side by side and compares price, delivery time, reviews and how easy it is to pay. If you run a children's clothing shop in Chilanzar, your direct competitors are the neighbouring kids' shops and the Instagram sellers with a similar range.
An indirect competitor solves the same customer problem in a different way. A mother who needs an outfit for a holiday does not have to visit a shop. She can order on Uzum, hire a seamstress, borrow from relatives or go to the bazaar. The product is different, the need is the same, and the money is spent once, not necessarily with you.
Three circles of competition
It helps to look at the market as three circles, from nearest to furthest.
- Direct: the same product for the same audience, compared head to head.
- Indirect: a different product for the same job, such as food delivery instead of a restaurant or a private tutor instead of a learning centre.
- Substitutes and doing nothing: do it yourself, wait, or spend the money on something else entirely.
Why indirect competitors are often the bigger threat
You can track a direct competitor's prices and ads. An indirect one stays out of sight, so a company can spend years fighting the shop next door while customers drift to a different solution.
In B2B the last circle is often the strongest. Instead of hiring a cleaning or accounting contractor, a company takes on one more employee or leaves everything as it is. A discount rarely beats that. A clear calculation does: what time, risk and mistakes cost when the work is done in-house.
How to find everyone you compete with
A list made from memory is usually short and flattering. Collecting evidence from several places is more reliable.
- Ask buyers what else they considered and how they handled the problem before you.
- Ask people who left without buying what they chose instead.
- Type the customer's own search phrase into search and maps, and look at neighbouring categories too.
- Browse OLX, Uzum and Telegram channels in your niche to see which names come up in discussions.
- Read the comments under competitors' Instagram posts: what people praise and what they complain about.
Building a competitor map, with an example
You do not need a huge spreadsheet. For each competitor, note the type, the offer and payment terms (cash, Click, Payme, instalments), the price level, the audience, the main messages and channels, and strengths and weaknesses taken from reviews. Record only what you can see yourself and do not guess at anyone's turnover. Then place players on a map with two axes, for example price and service level. Empty areas may be a niche, but check that demand exists there first.
Take a lunch café near a business centre. The owner watches the two cafés next door. A customer survey could show something else: some office workers order delivery, some bring food from home in a container, some go to a chaikhana, and some skip lunch. Each needs its own answer. Against delivery, a fast lunch within a short break and pre-orders through a Telegram bot. Against home food, a weekly menu with variety. Against the chaikhana, a clear waiting time.
Using the findings in your strategy
Against direct competitors you need a clear difference: service, speed, specialisation or location. Against indirect ones, explain why your format fits the customer's goal better. Against doing nothing, show the real cost of waiting. The findings also feed the product. If customers keep leaving for delivery, it may be time to build your own.
Common mistakes are saying "we have no competitors", watching only one or two neighbours, copying instead of finding a difference, and running the analysis once and forgetting it. Markets move, so review the list regularly, for example twice a year and whenever sales dip.
If you want to turn a competitor map into positioning, channels and a budget, the markdev team can help with marketing strategy. Tell us about your task and we will go through it together.
FAQ
What is the difference between direct and indirect competitors?
Direct competitors sell the same product to the same audience. Indirect competitors meet the same customer need in another way, such as delivery instead of a restaurant.
What if I think I have no competitors?
Ask customers how they solved the problem before you and what else they considered. You will almost always find indirect options or a habit of doing it themselves. No competitors usually means you cannot see them yet.
How often should I review my competitor list?
At least twice a year, and whenever sales change noticeably or new players and formats appear in your market.
Who should I analyse first?
The names customers mention themselves and those that appear most often in search, on maps and in Telegram for your topic. Start with three to five main options of each type.
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