How do you calculate the market size of the Food Delivery Service industry?

Case Interview Guesstimate Market sizing
Recent activity on Apr 25, 2019
4 Answers
16.0 k Views
Wibi asked on Jun 30, 2018

assume that it is an open-ended question:

- choose a city/region

- no specific target market in terms of supply/demand side

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
THEERTHA HARIHARAN replied on Jun 30, 2018
Management Student at BIM

Let us consider the city of Coimbatore, Tamil Nadu, India for our calculation.Coimbatore has a total population of 10,50,721 people. Then approximately it will be about 2,62,681 households. Since Coimbatore is one of the urbanised households in India. Since it is also called the Manchester of South India. Food delivery service is a huge market here.The city has a huge amount of people with upper middleclass and rich background.

It is hard to figure out the exact percentage of upper middle class and rich in india since only about 3% of Indians pay income tax and file their tax returns. Since Coimbatore is one of the urbanised centres , the number of people who are ready to afford food delivery is quite high than the national average. Already few industries are doing fine including SWIGGY which was loaunched recently. Many Restaurents already have their own Food Delivery Service. Since the many companies like Uber have already launched apps to place orders the competition is going to be fierce.

Considering 30% of the population come under affordable/willing category a little larger than the national average, we get 78,804 households. Eliminating various constraints such as Restaurents, Traditional Hotels, Various other conventional competitions it would be like 60% of the households who will be willing. Then we get 47,282 households. Considering on average they order once a month for average of Rs.1,750 then, The market size would be 5,67,384 deliveries a year, thats 1,554 deliveries per day.

Was this answer helpful?
3
Serhat
Expert
replied on Apr 25, 2019
BCG | Kellogg MBA |82% Success rate| 450+ case interview| 5+ year consulting | 30+ projects in ~10 countries

Hi Wibi,

We are happy to provide you feedback on your solutions.

Would you want to try your best solution first? Happy to improve it together.

Best

Serhat

Was this answer helpful?
2
Shreyas updated an answer on Nov 08, 2018

Estimate market size of swiggy food delivery service in Mumbai

Let us assume that the population of Mumbai is 10 crores

Out of the hundred percent population let's say 50% a man and 50% of women

35% of the 50% male population and 35% of the 50% women population is working class and each . 5% are children and. 5% are senior citizens who would be in ordering from swiggy

That adds up (. 5 + 35 + . 5)*2= 72%

72% of 10 crores is 7. 2 crore

let's say swiggy gets its 65% business from high income group 30% business from medium income group and 5% business from low income group

The probability that a low income group person would buy from swiggy is 1 upon 80, similarly from middle income group it is one upon 50 and from high income group it is one upon 20

Adding all the mutually exclusive cases we get,

(.05*1/80+0.3*1/50 +.65*1/20)*7.2cr= 2817000

We approximated 2817000 deliveries by swiggy in a day whereas the real number is 300000

(edited)

Was this answer helpful?
2
Anonymous A replied on Apr 23, 2019
Was this answer helpful?
1