Calculating Market Size

I read an interesting article about how although Belgium has about the same number of internet users as South Africa, the size of the internet advertising market is $236m vs. $30m in South Africa. With a population of over 47m people, $30m seems dismal compared to other countries and one might interpret this as large market potential.

However, the number of tax payers in South Africa numbers only 4.6m. Many firms that estimate South Africa's market potential miscalculate by basing it on its population or by extrapolating per capita GDP times population. However, when calculating market potential in South Africa, one must be cognizant that South Africa has a 50% poverty rate and a seriously polarized society. One cannot simply use metrics used in the U.S. or Europe to calculate market size in South Africa.