How do you approach a market sizing question?

Market sizing tests structured estimation, not knowledge. The interviewer is watching your assumptions, not your answer.

Two approaches:

• Top-down — start from a large known figure and narrow with successive filters. Population, then the relevant age band, then the proportion likely to buy, then purchase frequency and price.
• Bottom-up — build from units. Number of outlets, average transactions per outlet per day, average value, multiplied out.

Doing both and comparing is the strongest approach when time allows, because convergence gives confidence and divergence reveals a bad assumption.

What actually earns marks:

• State every assumption out loud and use round numbers that are easy to calculate with.
• Segment where behaviour genuinely differs — urban and rural, or income bands — rather than applying one average to everyone.
• Sanity-check the result. If your figure implies every household buys forty units a year, say so and revisit the assumption.

Note: Never guess silently. An answer that is wrong but transparently reasoned scores far better than a correct number with no visible logic.