I'm looking to estimate the market size of fireworks in china. For that reason I propose the following approach, I would love to hear your opinion:
I would start to estimate the # Customers x Avg. Spend per customer.
To estimate # Customers: I would find the # business that buy fireworks x # households that buy fireworks.
- To estimate the # of business that buy firewors I would find # people of working age on China that work on firms / Average # people per firm.
- To estimate the number of people of working age in China I would start by Chinese population x % in working age that work in firms.
- For that I would start segmenting 1b population into population on working age 52.5% (Population between 18-60 years) = 525 m. Then I would segment this by % Employed ( 90%) and % Unemployed (10%), then I would segment the %Employed into % Working by firms (80%) and % Self employed (10%), this would give me a 380m.
- To estimate the Average # people per business I would do the following segmentation: - 20 employes for 90% of firms - 50 employes for 9% of firms - 200 employes for 1% of firms This gives me 18%
- So I would have a total of 21.1 m of business. I assume the % that buys fireworks is 0.1% so 21 K,
- And for homes I would segment by number of people / people per home (2) and I get 500m then I assume 0.1% buys fireworks so 5m homes.
To estimate the average spend per customer: I would multiply price (0.6) by Quantity which I segment by business (20 - which are 10% of their customers) and homes (12 - which are 90% of customers) and I guet 13.
I get a market of 36.7m
What do you guys think?