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Case study #10: Market size in China
The last in our ten-part series, this case study looks at the potential market for disposable nappies in China. Here's our solution to this interview question.
Case study examples
Case interviews allow you to demonstrate how you think - your ability to understand a problem, break it down into its requisite parts, analyse them and communicate a solution. In this series, we give you ten case studies to give you an idea of how to approach the case and how to walk through it with your interviewer.
You may want to consider the case question first and think about how you might structure a response before looking at the ‘answer’. Of course, bear in mind there are many ways to answer a case, so this is just one example!
For the purposes of these examples, we will only look at market sizing and business cases.
Case study #10: Market size in China
What is the size of the market for disposable nappies in China?
This is another common market sizing type question.
We can consider:
- Size of the population in China
- The number of women who are of childbearing age
- The number of children in China
- The number of children who are under the age of two who would need nappies
So, let’s see if we can break this down.
You: I’m going to start with the size of the population in China, which I think is about 1 billion.
Interviewer: Sounds good to me.
You: Great, I think China has the opposite problem to Australia, which has an aging population. Instead, I think China’s population might be young?
So, I’m going to assume that 60 per cent or 600 million of those inhabitants are of ‘childbearing age’, of which we can say roughly half are women. So that means about 300 million Chinese women would be of childbearing age. Does that sound about right to you?
Interviewer: Yes. Continue.
You: Let’s assume then that about two-thirds of Chinese women have children. That means 300 million women times two thirds, which roughly equals 200 million women have children. I think the family size in China is restricted, I’m not sure the one child policy still exists anymore so let’s say the average family has 1.5 children. This would mean that there are 300 million children in China.
Of those, we have to understand how many of those would be under the age of two. I’m going to assume roughly about a tenth, which comes to 30 million children under the age of two. I think that sounds about right.
So there are at least 30 million possible customers of disposable nappies.
Interviewer: Are there any other considerations?
You: Well, I guess this assumes that all these women would want to use disposable nappies.
I’m not sure what the trends are like in China but there may be a swing towards using more environmentally friendly and reusable products. Maybe like cloth nappies or biodegradable materials.
This is an area that I would have to research further.
Interviewer: You’re right, alternatives to disposable nappies should also be considered. How would you go about researching this?
You: There are a couple of ways I would research this. First, I would try to understand trends in nappies in comparable markets. For example, which markets does China look to and seek to emulate? For example, in Australia, I know there is a slow movement towards environmentally friendly products and consumers becoming more aware of their choices. It would be interesting to understand how these trends might be translating to the Chinese market. This might require some desktop research and reading of trend reports. Secondly, I think it would be really important to talk to target customers in the Chinese market, such as parents directly. This would give an insight into how they feel about disposable nappies and if our sizing is accurate.
Interviewer: Great, let’s move on.
You made it! This was the last in our ten-part case study series. Take a break, then, check out our 23 consulting case interview questions for ambitious grads.