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Henning

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7

What is the market size in $ for online grocery market in Dubai?

My approach:

1. Residential consumption:

# People > People/household > Avg. monthly Household consumption > % purchased through online

2. Commercial consumption:

On average people eat out twice every week > 2/7 * (Monthly Residential Online Grocery consumption)

3. Total consumption/market size: Residential + Commerical

I have the following doubts -

1. Is there another approach for this problem, example from the supply side

2. For residential consumption, how to come up with average monthly household consumption

My approach:

1. Residential consumption:

# People > People/household > Avg. monthly Household consumption > % purchased through online

2. Commercial consumption:

On average people eat out twice every week > 2/7 * (Monthly Residential Online Grocery consumption)

3. Total consumption/market size: Residential + Commerical

I have the following doubts -

1. Is there another approach for this problem, example from the supply side

2. For residential consumption, how to come up with average monthly household consumption

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Coaching mit Henning vereinbaren

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Well to think a bit outside the box here:

I would argue the market for online groceries in Dubai is the same as the market for groceries in Dubai. I don't see why that would be a structurally different market that a player in online groceries could not address.

Bottom line: I would argue you calculated the share of online channel in the grocery market. The (addressable) market size for an online grocery provider is equal to the total grocery market.

Well to think a bit outside the box here:

I would argue the market for online groceries in Dubai is the same as the market for groceries in Dubai. I don't see why that would be a structurally different market that a player in online groceries could not address.

Bottom line: I would argue you calculated the share of online channel in the grocery market. The (addressable) market size for an online grocery provider is equal to the total grocery market.

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Hello!

I like the approach overall, which is the key hting.

however, careful, you are missing something key.

not all groceries order happen online in Dubai, and this is what you seem to assume the way the case is presented.

Hope it helps!

Cheers,

Clara

Hello!

I like the approach overall, which is the key hting.

however, careful, you are missing something key.

not all groceries order happen online in Dubai, and this is what you seem to assume the way the case is presented.

Hope it helps!

Cheers,

Clara

Clara, thanks for your reply. The last part of Residential consumption takes into account whether the grocery is purchased online or not - is this what you are also hinting at? Also, how to estimate the consumption per household? — Anonym A am 26. Feb 2021

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Hey, broadly correct.

You can also start with estimating total grocery market size and then work out the online part of it. Or you can analyse what % of people in different age buckets will order online i.e older people will not use online grocery shopping as much as compared to younger.

Hey, broadly correct.

You can also start with estimating total grocery market size and then work out the online part of it. Or you can analyse what % of people in different age buckets will order online i.e older people will not use online grocery shopping as much as compared to younger.

Adi, thanks for your reply. Any way by which total grocery market size could be calculated from supply side? or should it be calculated only from the demand side? — Anonym A am 26. Feb 2021

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Hi there,

overall I think you managed to grasp it correctly!

Cheers, GB

Hi there,

overall I think you managed to grasp it correctly!

Cheers, GB

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Hi there,

Honestly, I would break the population down by either age or income, or both (if you can keep it simple). Both are directly correlated to 1) The # of groceries I buy AND 2) The likelihood/frequency of me buying online.

I.e. richer people will spend more $ on groceries. Younger people as well as richer people will spend a larger % of their grocery wallet on online.

Remember, with most market sizing you actually have to segment out things....you're using huge general assumptions here without accounting for demographic differences!

Hi there,

Honestly, I would break the population down by either age or income, or both (if you can keep it simple). Both are directly correlated to 1) The # of groceries I buy AND 2) The likelihood/frequency of me buying online.

I.e. richer people will spend more $ on groceries. Younger people as well as richer people will spend a larger % of their grocery wallet on online.

Remember, with most market sizing you actually have to segment out things....you're using huge general assumptions here without accounting for demographic differences!

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