Every pitch deck has a market-size slide, and most of them are fiction. “India’s FMCG market is ₹X lakh crore; we only need 1%” tells an investor that you haven’t thought about your actual customer.
The three numbers
- TAM (Total Addressable Market): everyone who has the problem, × what they would pay per year.
- SAM (Serviceable Addressable Market): the part of TAM your product, language, geography and channels can actually serve.
- SOM (Serviceable Obtainable Market): the slice you can realistically win in the next 3–5 years.
Do it bottom-up
Start from a unit you can count, then multiply:
Number of target customers × annual spend per customer = market size
Example: billing software for pharmacies
- Pharmacies in India: use a public estimate and cite it. Say [N] pharmacies.
- Share that are digitally ready (smartphone, internet, some software use): assume 40%.
- Price: ₹500/month = ₹6,000/year.
- TAM = N × ₹6,000. SAM = 40% of that. SOM = what your sales team and channels can reach in 3 years, perhaps a few per cent of SAM.
Every number has a source or a stated assumption. That’s what makes it believable.
Where to find Indian data
- Government data: MCA company data, GST and Udyam registration numbers, census and NSSO surveys, RBI publications, ministry annual reports.
- Industry bodies: trade associations publish member counts and reports.
- Public company filings: annual reports and IPO prospectuses (DRHPs) contain rich market data. Licious, Zomato, Nykaa and others’ filings are goldmines.
- Your own counting: walk a market street and count shops. Investors love founders who did the legwork.
Common mistakes
- Double counting customers across segments.
- Ignoring willingness to pay: a huge population doesn’t mean a huge market if they can’t or won’t pay.
- Ignoring how you’ll reach them: a market you can’t reach isn’t your market.
Your takeaway
A defensible ₹500 crore SAM beats an imaginary ₹5 lakh crore TAM. Size bottom-up, cite every number, and be ready to explain each line.