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What is the market size in $ for online grocery market in Dubai?

Bain BCG marketsizing MBB Mck
New answer on Feb 28, 2021
7 Answers
1.2 k Views
Anonymous A asked on Feb 25, 2021

My approach:

1. Residential consumption:

# People > People/household > Avg. monthly Household consumption > % purchased through online

2. Commercial consumption:

On average people eat out twice every week > 2/7 * (Monthly Residential Online Grocery consumption)

3. Total consumption/market size: Residential + Commerical

I have the following doubts -

1. Is there another approach for this problem, example from the supply side

2. For residential consumption, how to come up with average monthly household consumption

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Best answer
Henning
Expert
replied on Feb 25, 2021
Bain | passed >15 MBB interviews as a candidate

Well to think a bit outside the box here:

I would argue the market for online groceries in Dubai is the same as the market for groceries in Dubai. I don't see why that would be a structurally different market that a player in online groceries could not address.

Bottom line: I would argue you calculated the share of online channel in the grocery market. The (addressable) market size for an online grocery provider is equal to the total grocery market.

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Clara
Expert
Content Creator
replied on Feb 26, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

I like the approach overall, which is the key hting.

however, careful, you are missing something key.

not all groceries order happen online in Dubai, and this is what you seem to assume the way the case is presented.

Hope it helps!

Cheers,

Clara

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Anonymous A on Feb 26, 2021

Clara, thanks for your reply. The last part of Residential consumption takes into account whether the grocery is purchased online or not - is this what you are also hinting at? Also, how to estimate the consumption per household?

Adi
Expert
Content Creator
replied on Feb 26, 2021
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Hey, broadly correct.

You can also start with estimating total grocery market size and then work out the online part of it. Or you can analyse what % of people in different age buckets will order online i.e older people will not use online grocery shopping as much as compared to younger.

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Anonymous A on Feb 26, 2021

Adi, thanks for your reply. Any way by which total grocery market size could be calculated from supply side? or should it be calculated only from the demand side?

Antonello
Expert
Content Creator
replied on Feb 27, 2021
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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Raj
Expert
Content Creator
replied on Feb 28, 2021
FREE 15MIN CONSULTATION | #1 Strategy& / OW coach | >70 5* reviews |90% offers ⇨ prep-success.super.site | MENA, DE, UK
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Gaurav
Expert
Content Creator
replied on Feb 28, 2021
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies

Hi there,

overall I think you managed to grasp it correctly!

Cheers, GB

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Ian
Expert
Content Creator
replied on Feb 26, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

Honestly, I would break the population down by either age or income, or both (if you can keep it simple). Both are directly correlated to 1) The # of groceries I buy AND 2) The likelihood/frequency of me buying online.

I.e. richer people will spend more $ on groceries. Younger people as well as richer people will spend a larger % of their grocery wallet on online.

Remember, with most market sizing you actually have to segment out things....you're using huge general assumptions here without accounting for demographic differences!

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