Market Size Analysis in Uzbekistan: How to Estimate Demand

Why run a market size analysis before spending on ads

Plenty of founders in Uzbekistan sign a lease or start running Instagram and Telegram ads first, then discover that too few buyers live within reach. Ads can bring in people who already want something; they can't create demand that isn't there. A market size estimate turns a hunch into a number you can plan around: whether to enter the niche, which district or city to start in, and what revenue a sales plan can honestly assume.

Measure it in soums or in physical units such as customers, orders, litres or pieces, whichever is easier to verify. A clinic might count visits; a wholesaler, tonnes and deliveries.

TAM, SAM and SOM: three levels of the market

The most common mistake is to quote the biggest figure as your opportunity. Separate three levels:

Banks, investors and your own sales plan care about SOM. TAM looks good on a slide, but only SOM turns into revenue.

• TAM, the total market: all demand for the category, for example every household in Tashkent that buys bottled water.
• SAM, the serviceable market: the part you can reach given your format, location, price segment and delivery channels.
• SOM, the obtainable market: the share you can realistically take after competitors, budget and capacity.

The top-down method: from population to buyers

The formula is market size = number of target buyers × purchase frequency × average ticket. Say you're weighing a language school in Fergana. Start from official population figures for the district, narrow to the age group and income level that can pay, then estimate how many would enrol in a year. You can ask in local Telegram groups and parents' chats, and check competitors' prices and class schedules to estimate average spend.

It's fast, but errors compound: a wrong guess at one step carries into every step after it. Use cautious numbers at each stage, and subtract what existing schools already serve before deciding how many students you could attract.

The bottom-up method, and why to use both

Bottom-up starts from observed facts: how much one outlet or seller moves in a month, how many such outlets operate in the area, and what share they hold. Alternatively, run a small pilot, a few weeks of sales in one district, and scale those results to other districts with adjustments.

Calculate both ways. If the two results land close together, you can trust the estimate more. If they differ widely, find the assumption responsible; it's usually purchase frequency or the share of people willing to pay your price.

Where to find data in Uzbekistan

Ready-made data for narrow niches is scarce, so build the picture from several sources:

• official statistics on population, income and number of businesses by region and district;
• customs and foreign trade data for imported goods;
• industry associations and public company reports;
• Google Keyword Planner and Yandex Wordstat for interest and seasonality;
• Uzum, OLX and map listings for seller counts, prices, reviews and competitor density;
• surveys, plus conversations with suppliers and distributors;
• a small paid pilot.

Document assumptions and test the result

Next to every number, write its source or the reasoning behind the assumption. Anyone reading your model should see which figures are facts and which are guesses. Build three scenarios: pessimistic, base and optimistic.

Then run sanity checks. Does the implied consumption per resident look realistic? Do nearby competitors' estimated sales fit inside your total? What do experienced people in the industry say? Remember seasonality: demand for air conditioners, school supplies or holiday gifts is far from even across the year. Also check direction. A small market that is growing can beat a large one that is slowly shrinking, so compare the target group over several years, watch competitors opening or closing, and track search interest.

The mistakes we see most often:

• presenting the total market as your sales potential;
• relying on a single source;
• ignoring seasonality;
• hiding assumptions.

Using the result to make decisions

The figure exists to support decisions: enter the niche or not, which segment to pick, what sales target is sensible, how much advertising the market can justify. If SOM turns out small, a leaner format or another district may be smarter than pushing harder.

If you'd like a second pair of eyes, markdev helps businesses build market models, test assumptions and turn them into sales and advertising plans as part of marketing strategy and consulting in Uzbekistan. Tell us about your task and we'll discuss what data you already have and what is worth calculating.