Mistake in calculations of pregnant woman market size

Question

Hi all,

I think there is a mistake in the annual size of the pregnant woman market. To prove my point, there is 15 million woman pregnant at given time in China. This is correct. Assuming lineral growth there is 1.(6) new pregnencies each month (15m/9). So annually there is 12 * 1.(6) new pregnancies that is equal 20 million of kids on average each year. So the market size should be 20 million, not 15 million. Sure, there are some woman that got pregnant at the end of the year, but there are also some that got pregnant at the end of previous year, so on average the annual market size in terms of # of woman is 20 million. We also have an average expenditures per customer per year. So the market size in value is $150 * 20m * 10% = $300 mln

Other way round I initially calculated the number of children each year by:

750m (# of woman) * 2 (number of children per life) / 75 (average life expectancy)

This gives you also 20 million children per year and I think this is also a good way to calculate th market size.

Please let me know if you agree or am I wrong?

Thanks

Answer 1

Hello,

Your reasoning makes sense, but you have to consider the following:

With an average expenditure of €150 per woman per year

That means that you have 2 different approaches that you can use:

You consider the average expediture per year per woman (150€) and you consider the average number of pregnant women during the year (15M) --> 150€ x 1.5M =225M€
You consider the total number of pregnancies during the year (20M) but you consider the actual expenditure per pregnancy (150*9/12=112.5€) --> 112.5€ x 2M=225M€

Does it make sense?

Best,
Luca

Answer 2

Hi there,

You are right that the total number of new pregnancies is 20m, however we are estimating the annual market size of the vitamins (which are taken only by currently pregnant women which we know is 15m at any point of time).

A way to look at this using your logic: "an average expenditure of €150 per woman per year", so over the 9 months course of pregnancy it's $150/12*9=$112.5. If you multiply this by 20m new pregnant women (and 10% usage), you'll get exactly $225m again.

The trick is that the expenditure is annualized, however logically the same woman is not going to spend $150 per year, because the pregnancy only lasts 9 months.

Hope this helps!
Best,
Vasily

Answer 3

Hello!

Trick here is to see annualization.

You cannot consider the pregnant women at all times, but those who are pregnant in particular month.

It´s the same whenever we calculate total number of births/deaths by calculating total population / 80 (normal life spam) and this gives us the annual number.

Cheers,

Clara