Market Share

Market share shows how a company is performing relative to its competitors. It can be measured by revenue or by the number of units sold.

For example, if total sales in a country's smartphone market are 200 million in a year and one company sells 30 million worth, its market share is 15%.

A rising market share means a company is growing faster than its market, winning customers from competitors. A falling share may signal that rivals are gaining ground, even if the company's own sales are still growing.

Companies with large market shares can benefit from economies of scale, stronger bargaining power with suppliers, brand recognition and the ability to influence prices. However, very high market shares can attract attention from competition authorities, which may investigate whether a company is abusing a dominant position.

Market share depends on how the market is defined. A company might have a small share of the global drinks market but a large share of the premium sparkling water market. Analysts and businesses should be clear about the market definition when comparing shares.