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How to deal with B2B/B2C in market sizing - for instance, electric car market

Market sizing
New answer on Dec 30, 2020
6 Answers
1.2 k Views
Anonymous A asked on Dec 09, 2020

Hey,

I have this issue frequently when doing market sizing. It is quite straight forward to narrow a problem down in terms of the B2C market (age, demographics, income ... etc.) and then arrive at a first market estimate (let's say for electric cars sold). However, I then struggle how to walk through a second branch, such as B2B. Is there a common rule of thumb of how many business there are per person? I would assume for 20 persons, there is at least one business. Then I would have to segment the businesses by industry which can get quite daunting.

What is the way to go here?

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Vlad
Expert
replied on Dec 09, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

In general, you have two options of including different use cases in your market sizing (b2b. commercial, etc):

  1. Calculate the private use first and then make an assumption re b2c / b2b ratio. E.g. calculate the private real estate in the city and then make an assumption about the commercial real estate as the relative % of private.
  2. You can add the b2b use cases right at the beginning of your calculations. For example, if you need to calculate the tire market for light vehicles, you can assume that every 5th car in the street is commercial, thus the total number of cars = # of private cars / 4 * 5. After that, you can calculate the whole tire market

In your particular case, I would try to clarify what exactly b2b means. Are you talking about the companies that subsidize the rides for the employees? (Then you can use the % of your friends who have their rides subsidized. Although B2b, in this case, is already included in the private consumption). Or you are talking about the Uber drivers who use carsharing because they can't afford car ownership? (Make an assumption re the % of taxis).

Best

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Ian
Expert
Content Creator
replied on Dec 09, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

Your question has me slightly confused, and I think it's because you're confusing yourself.

In general, you either do B2C OR to B2B. Likewise, you either do bottom-up OR top-down.

It's bizarre to do both.

So, in the case of the EV market, I would very much to B2C and break it down by population segments (probably income). Once done, I have the total consumption of EVs. There is not need to do B2B at this point!

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Anonymous A on Dec 09, 2020

Why? Private person can buy cars but also businesses?

Clara
Expert
Content Creator
replied on Dec 10, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

This is one of the key clarifying questions at the beggining, when you are defining your population.

Should I focus in B2B, B2C, or both?

Hope it helps!

Cheers,

Clara

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Adi
Expert
Content Creator
replied on Dec 09, 2020
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience
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Antonello
Expert
Content Creator
replied on Dec 30, 2020
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:

  • https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
  • https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
  • https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
  • https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

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Gaurav
Expert
Content Creator
replied on Dec 10, 2020
#1 MBB Coach(Placed 750+ in MBBs & 1250+ in Tier2)| The Only 360 coach(Ex-McKinsey + Certified Coach + Active recruiter)
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Vlad gave the best answer

Vlad

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School
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