Estimate the market size ($/year) for western wear in India today and five years from today. 

Case Interview market estimation
Edited on Feb 29, 2020
4 Answers
Anonymous A asked on Feb 28, 2020

Client is a clothing retailer (like zara or vero moda) who is considering entring India. They would like an estimate of the size of the wertern wear retail market today and fiver years from today.


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Content Creator
replied on Feb 28, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score


For the first part, I would approach the problem startin from the total Indian population.
To do a forecast, you have to consider different factors:

  • Increase of population buying western wear (e.g. if you do the hypothesis that people over 50, nowadays, buy only traditional Indian clothes, then you can assume to increase this treshold by 5)
  • Increase of total Indian population
  • Increase of population with access to big cities with this kind of shops
  • Increase of average expenditure for clothes (you can assume that is similar to GDP trend)

You can associate a factor to every of these effects and run your calculations.

Hope it helps,

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Content Creator
updated an answer on Feb 29, 2020
Top rated MBB coach with many offers /Ex McKinsey EM in New York /6 years McKinsey recruiting experience/Real cases


You can use the standard approach of

1. Estimate population - so say 1.3B

2. Estimate population in target markets (T1/T2 cities) - assume 40% so ~500M

3. Then estimate the % who will be able to afford western wear (that depends on the price points you are looking at). This number will range a lot but if you have a good justification you can choose any reasonable number.

One approach is to look at age groups - India is a young population - 65% of India is under 35. We can assume that in urban india this distribution holds. We can also assume that the target market is mostly up to ages of 50. So about 75% of the population is eligible. That is ~ 375M

4. Next we need to account for considerations of price points, disposable income, cheaper alternatives etc. This will again need to be a ballpark based on percieved income distribution. Let's say ~60% or ~200M will be able to afford and will be willing to purchase these clothes

5. Now you have to multiply $200M by avg price and avg volume to get market size (let's say $50 per year in total spend) - $200M x $50 =$10B

Next for 5 years you can do the following

1. Assume population growth rate as current - 1% 2. Urban population growing double of avg rural so 2% growth rate

3. Disposable income growth rate percentage approximately 5%. Compound this over 5 years

4. Either assume proportion spent on western wear remains the same. In which case growth equals disposable income growth times urban population growth OR increase percentage growth spent on western wear and calculate accordingly

Hope that helps, Udayan


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Content Creator
replied on Feb 29, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut


I would tackle this estimation with average expenditure on clothes from different groups of indians, for which I would segment the population in clusters (e.g., age groups, purchasing power, etc.)

This would be much easier than calculating total stores in India and their average income.

For the estimation on the growth, do a proxi with the estimated growth in GDP per capita.

Hope it helps!



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Anonymous B replied on Feb 28, 2020

Is this a question?

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Luca gave the best answer


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