Market Opportunity
The US market opportunity for B2C Martech solutions is huge. Here is how Braze does the assessment.
International Data Corporation, or IDC, estimates the market for marketing campaign management software to reach $15.0 billion in 2021 and $19.4 billion in 2024. We believe this understates our addressable market because in addition to marketing campaign management capabilities, we offer analytical tools that help companies better understand their consumers and improve the overall consumer experience.
We estimate that, based on our current average customer spending levels, the annual market opportunity for our solution is currently $16 billion in the United States alone. We calculate this estimate using the total number of U.S. companies with 50 or more employees per the U.S. Census Bureau. We segment these companies into five cohorts based on the number of employees: companies that have between 50 and 99 employees, companies that have between 100 and 1,499 employees, companies that have between 1,500 and 9,999 employees, companies that have between 10,000 and 19,999 employees, and companies that have 20,000 or more employees. We refine the number of companies in the United States within certain cohorts by estimating the percentage of companies in such cohorts that are likely to need a sophisticated customer engagement platform like ours. Next, we multiply the number of companies in each cohort by the average ARR for our customers in fiscal year 2021 with a corresponding number of employees. For cohorts with fewer than 20,000 employees, we use the average ARR for all customers within each cohort. For the 20,000 and greater employee cohort, we use the average ARR for the top 25% of our customers in that cohort measured by ARR.
While Braze does not give the details of its workings, I did some estimates using data from the US Census Bureau (as of 2018):
| Employees | Total Companies | Average ARR ($) | Market Size ($M) |
| 50-99 | 130,160 | 30,000 | 3,905 |
| 100-1,499 | 106,938 | 75,000 | 8,020 |
| 1,500-9,999 | 5,833 | 500,000 | 2,917 |
| 10,000-19,999 | 572 | 1,000,000 | 572 |
| 20,000+ | 537 | 1,500,000 | 806 |
The total market size comes to $16.2 billion – close enough to Braze’s $16B estimate for the US market.
The international market would probably be double that of the US market, with Europe accounting for about half, Asia-Pacific for a quarter, and Middle-East, Africa and Latin America making up the rest.
Thus, the global B2C Martech opportunity comes to about $30 billion.
There is another way to estimate this. The global adtech spend (on digital customer acquisition and branding) is about $350 billion in 2021, and I have estimated that the adtech:martech split is 90:10.
India accounts for about 1% of the global adtech spend, so we can expect martech spending to also be 1% of the global spend. I had estimated the India B2C spend in an earlier series (Part 13) at about Rs 2,500 crore which comes to just over $300 million, in sync with the 1% of the global $30 billion B2C Martech estimate.
To put this in perspective, the US market is about 50 times larger than India, not surprising given that the size of the US economy is 10 times that of India.
To summarise the key numbers about the B2C Martech:
- Total Addressable Market (TAM) is $30 billion, of which the US accounts for half and Europe a quarter
- India TAM is about 1% of the global market
- The developed markets (US, Europe and some parts of Asia-Pacific) will account for about 85-90% of the B2C Martech spends
- B2C Martech spending is about a tenth of the global Adtech spending
Even as the Indian market will grow in the coming years thanks to the inflow of capital and public listings of B2C companies, what is clear is that the Developed Markets opportunity is many times that of the Emerging Markets – probably 10-20 times larger.
