McKinsey Case Interview: Market Sizing Walkthrough 

Very authentic interview, unlike many "perfect" cases in other videos which seem totally staged. Especially appreciated the honest feedback at the end. Thank you for the effort!

If each diaper costs 2 cents, shouldn't she multiple 1400 diapers with 0.2 cents instead of dividing it?

The calculation at 16th minute is fun, she is adding and subtracting 10% from each side and then wondering what the answer should be...36

Hats off to Jenny. As the interviewer, keeping a track of the calculations is no mean feat. She did it so easily. Also, Even though Lisa stumbled, her presence and composure were very good.

Really like the fact that this was authentic; It shows that even the most experienced of us are still not perfect. This tells us that interviewers simply do not expect a perfect outcome but in fact a sound structure with 'common sesnse' and a structured approach

Chinese currency is not Yen but Yuan. Yen is Japanese currency. It doesn't sound like a big difference in English but to people who are familiar, they are completely two things.

Super helpful. Thanks Lisa and Jenny for walking us through this exercise.

She handled it so well. This was tough!!

When I heard disposable diapers, I thought that maybe there could be 2 kinds of people who could use it....first and obviously the babies but second, maybe adult diaper market could also be considered. Now I know that it would not be a huge market or maybe even a significant market in comparison to the diapers market for babies, but I suppose to show MECE approach, one could have considered it and then later with the mathwork show that the adult diaper market is insignificant to the baby one. Just a thought. Otherwise I thought the the structure was pretty apt

Loved this interview, thank you both for doing it. Very easy to follow along to and gave me a clear understanding of what's expected in a market sizing case. Loved also that it wasn't "perfect", came across as very authentic!

"Market Size" and "Market Value" are different. I thought this was a market size question so I ended up estimating how many disposable diapers are there in the Chinese market per year but as interviewees, we should clarify this question at the beginning.

I was expecting a better performance from a Mckinsey consultant. She did many math errors and wasn't able to do a sanity check for the final number. But great work thank you.

Just to add. You could have added adults as well (Age group : 60+ years)

Why is there a major time difference between the Bain Market Sizing case and the McKinsey Market Sizing case? Is this due to the difference in style between the two companies?

Super helpful, thank you both!!!

Super impressed by how closely were the calculations tracked. For the preference of the disposable diapers vs reusable diapers, I would've probably asked for some research related numbers. When I did this case myself, I used a 50-50 split which luckily came out to be 35 million. However, the interviewee's numbers based on the rural vs urban population was probably a better way to work out this number.

5/80 is true if distribution is uniform, not normal. However, really well done case and get's the idea through.

This model was specific to an interview environment right? Because I think in a lot of metrics we can get help from the internet ie the census data and population distribution to the exact numbers. Great amalgamation of analytical thinking and with the feedback 👏🏻

Logic is reasonable but math errors are keep distracting me: Spending on disposable diapers per week= 280/50 = $5.6 which can be rounded to $6 per week instead $4. Also the # of children within the age range (0-5): 1.2BN * 5/80 = 75M.

The content is really helpful. However, Yen is Japenese currency, Chinese currency is Yuan or just RMB. Big difference.

I really like your channel! Pls keep it up

This channel is so helpful thank you!

Anyways it was nice, i am just starting to learn this and it's helpful, good job people!!!

Great technique. The only thing that was weird to me was the population estimation. A population pyramid is far from a normal distribution in terms of age and specially in a growing country such as China.

Excellent work. Thanks so much for your interesting videos on consulting.

Thank you so much for the video! I guess one factor that has to be taken into consideration is that the penetration rate would be very different between urban and rural areas - for urban areas, probably 95% of babies would use diapers; but for rural areas, which accounts for a significant proportion of the overall population, the % could drop to 20% or even 10% (assumptions made based on their income level and access to disposable diapers).

The structure that I took was to divide the entire population (1.4B) into urban and rural (6/4 split) and then taking half of which for females. For the urban population, I assumed the age group typically suitable for childbearing to be from 30-40 which is around 15% of the population, and within those, I assumed 70% that would want to have children (relatively low due to urban population having more women working). Assuming even distribution of people having babies within the age range, I took 20% to reflect the population that had a baby in the past two years (taking the assumption that the majority of diapers are from babies from 0-2 years old and that the two-child policy is in effect). Finally, I assumed 60% of the urban population buys disposable instead of reusable due to better economic conditions. For the rural population, I assumed the age group typically suitable for childbearing to be from 20-30 which is around 30% of the population, and within those, I assumed 90% that would want to have children due to cultural reasons. Assuming even distribution of people having babies within the age range, I took 30% to reflect the population that had a baby in the past two years. Finally, I assumed only 30% of the rural population buys disposable instead of reusable due to worse economic conditions. After calculation, I arrived at around 10M babies requiring diapers for the target year. I assumed 6 diaper changes daily for the urban population and 4 diaper changes for the rural population and assuming 350 days a year and 10 cent per diaper price (cheaper than US) I got a final number of $1.05 Billion market size in the urban market and $0.7B for the rural market. That would make 1.75B in total annual market size. Only started preparing for market sizing interviews so I apologize for making obvious mistakes or incorrect assumptions!

Why is it 1400/ 10 cents?? Can you explain as the estimated per diaper spent was 20cents???

Good one! However, how about the adult disposable diaper market? Shouldn't she have clarified about it earlier? (Or did I missing the clarification of baby-only market?)

Can you explain the break down of 1.2billion? as you have estimated 5 out of 80

Interesting! Keep it up :D

What about the diaper usage for population above 60?

Its a total waste of time seeing good consultants second guessing diaper mrp's. Its so much more efficient to rather Google the price & work on more important aspects

We were supposed to do 1400*0.20 = $280 and not divide right?

People should do approximations to simplify things. She overcomplicates even 5/80?! Uniform distribution not normal btw.

Why did you guys not include old people? In my calculation they were a bigger group than children!

superbb

The way she rounded the population of 0-5 year-old is 'even distribution', not normal distribution...

Would be interesting to ask a guy to take this interview lol

Chinese yen?🤔

The population of China is 1.4 billion

Shes not the smartest but her thought processes are very good

China has a strict one-child policy and maybe one household will have only one child. So we can work around a number of people in the age group of 25 to 35 yrs (just married) and decide on the number of couples in this age group and find the number of kids within the age group of o to 5 years. Then move on with the calculation of urban vs rural, not using diapers at all, cloth diapers vs disposable diapers, and so on........Just another way to solve the problem but it might be a little difficult as told in the video.

Could she pass the interview.

why she saying hundurd instead of hundred lmao

adult diaper?

🐾🐾🐾🐾🐾🐾🐾🐾

the assumption is totally unreasonable, for kids under 10 mom , at least 8-10 diapers a day, not 4. I think she should separate the ages into 6 month, 12 month, 18 month. .

hunderd

Typical Mckinsey jargon Seriously this is how you estimate a simple case like diapers? Overcomplicated ladies

chinese yuan...

her math skills is poor

An MD who doesnt know the difference between yuan and yen lol