Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Luca

100% Recommendation Rate

48 Meetings

2,595 Q&A Upvotes

USD 189 / Coaching

4

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

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.

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.

(edited)

4 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Luca

100% Recommendation Rate

48 Meetings

2,595 Q&A Upvotes

USD 189 / Coaching

Hello,

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,
Luca

Hello,

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,
Luca

Book a coaching with Clara

100% Recommendation Rate

59 Meetings

16,346 Q&A Upvotes

USD 229 / Coaching

Hello!

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!

Cheers,

Clara

Hello!

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!

Cheers,

Clara

Book a coaching with Udayan

99% Recommendation Rate

102 Meetings

3,671 Q&A Upvotes

USD 249 / Coaching

Hi,

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

Hi,

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

(edited)

Is this a question?

Is this a question?

Related case(s)

MBB Final Round Case - Smart Education

Solved 18.6k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.6 5 649
| Rating: (4.6 / 5.0)

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case

Espresso, Whatelse?

Solved 11.2k times
Espresso, Whatelse? Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand the root causes of this 2019 trend and how to increase its profit margin again.  
4.6 5 560
| Rating: (4.6 / 5.0)

Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand ... Open whole case

Hot Wheels

Solved 5.8k times
Hot Wheels Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability.
4.6 5 305
| Rating: (4.6 / 5.0)

Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability. Open whole case

McKinsey Digital / BCG Platinion: Oil & Gas Upstream Technology

Solved 4.1k times
McKinsey Digital / BCG Platinion: Oil & Gas Upstream Technology [PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.] Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstream, and downstream divisions, they have recently been experiencing competitivity issues in the upstream gas division, which brings in $1B in profits annually. Our client’s upstream division has offices in Australia and Indonesia. Their work is highly dependent on their IT systems, as they have to constantly monitor wells and pipes (pressure, hydrocarbon count, fluid makeup, etc.) The upstream division has two large legacies of IT systems that are primarily used for downstream operations but have been modified for upstream purposes. These systems are managed by a central team in the US which is responsible for all IT issues across the business. They triage issues/enhancements and then manage development teams in India and Finland who complete the work.
4.5 5 85
| Rating: (4.5 / 5.0)

[PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.] Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstr ... Open whole case

Bain 1st Round Case – BlissOttica

Solved 2.7k times
Bain 1st Round Case – BlissOttica Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
4.3 5 130
| Rating: (4.3 / 5.0)

Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? Open whole case