Examples of some important Guesstimates

Ques. How many people live in your housing society?

Ans. 

1. My society has two types of houses: Apartments and row houses.

2. I then think about the number of apartments and row houses. I remember
there are Apartment blocks numbered 1 to 30. There are 4 row house lanes
and each might have 8 row houses I guess.
3. Now I have the following first level estimates:30 apartment blocks and 32 row
houses.
4. An apartment block in my society has 9 floors each with 3 apartments. So,
27*30 = 810 flats.
5. A row house has 2 floors, each with 2 flats – makes the total as 2*2*32 = 128
flats.
6. So, total number of flats = 810+128 = 938. I know the average household in
India has approx 5 members. I also know that some flats are still not
occupied. I make a guess; let’s assume 10% flats are not occupied.
7. I get the final number of people living in my society: 938*0.9*5 = 4221.

Ques. Estimate the number of cigarettes consumed monthly in India

Ans. A good proxy in such a problem is the population of India, i.e., 1.2 billion.
Following is an effective way to segment this population:

1. The rural population consumes far fewer cigarettes than urban because of the
purchasing power difference.
2. Male consume more cigarettes than females in both urban and rural
populations.
3. Children below 16 years consume a negligible number of cigarettes.
4. Male to Female ratio in Urban is closer to 1 than that of Rural.
5. Male to Female ratio in younger generations is closer to 1 than that of older
generations. This is because of the increase in awareness level.
6. Bulk of the population start smoking after getting into a job and hence the
average number cigarettes are higher in older groups.
7. Total number of cigarettes from the supply side also comes to around 10
Trillion, which gives a good sense check on the final number.

Ques. How many cups of tea were consumed in Mumbai last month?

Ans. As a first step, inform the interviewers that each day of the week is being
considered equally. Tea consumption might likely decrease during the weekend as
people do not go to the office—so you might consider that as well. We shall go with
the first assumption.

The population of Mumbai is 18 crore; we shall round it up to 2 crores. 20% of this

population is assumed to be children who do not drink tea. 
Another assumption is that of the remaining population, 20% are habitual drinkers,
30% are regular drinkers, 20% are occasional drinkers, and 10% are non-drinkers.

The habitual drinkers may be said to have three cups of tea in a day. Regular
drinkers may be said to have one cup of tea in a day. The tea consumption of
occasional drinkers maybe once a week, and that of non-drinkers none at all.

Calculating proportions-

Habitual – 3 x 0.2 x 7 = 4.2 

Regular – 1 x 0.3 x 7 = 2.1

Occasional – 1 x 0.2 x 1 = 0.2

None – 0

Total = 6.5

Total cups per week = 6.5 x 1.6 crore = 10.4 crore

Ques. How many iPhones are currently being used in India?

Ans.

Clarify with the interviewers whether the question is about only a single version of
the iPhone or all versions put together. Here, we shall assume that all iPhones put
together are being talked about.

1. The first step toward solving this query will be segmentation. There are many
ways in which India’s population can be segmented. Here, we shall first
assume that only people who have attained a working age and are under the
age of retirement own an iPhone. Children and old citizens do not own an
iPhone. This removes 20% of the population as children and 20% as senior
citizens.
2. The next assumption will be that only the upper stratum of India’s income
range can afford an iPhone. This metric assumes that only 5% of the eligible
citizens from the previous filter can own an iPhone.
3. Now, it is not necessary that every member of this upper stratum will own an
iPhone. Other options, such as OnePlus, Samsung, etc., are also available.
However, a fair assumption would be that 50% of the eligible population from
the previous filter owns an iPhone.
4. Calculating the proportion of the population that owns an iPhone – 
5. 0.6 x 0.05 x 0.5 = 0.015
6. Total iPhones in India = 0.015 x 130 crore = 1.95 crore

Ques. How many cars are there in Delhi?

Ans.
Clarify whether the interviewer assumes just personal vehicles or all cars, as Delhi is
also a government seat. The assumption in this solution will be that only personal
vehicles are being talked about.

Firstly, the population of Delhi is 2 crores, rounding up. The average size of a family
in Delhi may be said to be four people, it being an urban region mostly composed of
nuclear families. Further segmentation may be as per income class or level. As is
customary, 30% of people may be said to belong to the lower class, 50% to the
middle class, and 20% to the upper class.

The calculation metric will be the number of cars per family. Among middle-class
families, 50% may be said to own a car, and the other 50% own no car. Among the
upper-class families, it may be said that all families own an average of two cars.

Calculating proportions-

Middle class families – 0.5 x 0.5 x 1 = 0.25

Upper class families – 0.2 x 2 = 0.4

Total = 0.65

Total cars in Delhi = 2 crore * 0.65/4 = 32.5 lakhs.

Ques. What is the Surf excel detergent usage in a day in India?

Ans. The best way to start with this question would be with the population.

India ~1.3 billion

Rural ~ 70% ~ 900 million

Urban ~ 30% ~ 400 million

Rural - upper BPL : ~ 40% = 360 million

Rural (BPL) : 60% 540 million

Rural (BPL)

We can assume Rural BPL mostly as collective households, averaging at 5 per

family: ~110 million

1. Mostly they use sachets. let’s average the usage 2 sachets of 3 rs each per
week: 24–30 Rs. per month ~ 25*110 = 2750 million INR.
2. Now Surf Excel is a little costly sachet , and given cheaper alternatives
available, we can assume its share to be around 5–10% =200 million
3. For per day: 200/30 ~ 7million INR

Rural (Above BPL)

 1. We can assume 4 sachets per week ~ 12 = 50–60 per month
2. Total household: 72 million = 72*60 = 4320 million INR monthly
3. Surf Excel share ~ 20% (others going to wheel, rin, ok, ghadi etc.) = 864
million INR
4. Daily use therefore: 864/30 = 28.8 million INR
5. Total Rural daily revenue: ~ 35 Million INR

Urban

1. Urban Low class ~ 30% = 120 million = 22 million household : Usage 250gms
per month: 50 INR = 1100 Million INR
2. Surf Excel share: 5–7% = 77 million INR.
3. Daily: 77/30 million INR = 2.10 million INR
4. Urban Middle class: - 40% = 160 million = 40 million households (4 per family)
5. Average use: 500 gms per month , 90 Rs per month = 3600 million INR
6. Surf excel share: 20–25% = 900 million INR
7. Daily : 900/30 = 30 million INR
8. Urban High Class: 120 million ~ 30 million households (4 per family)
9. Average use: 1kg per month, 200 INR = 6000 million INR.
10. Surf Excel (King here) ~ 70% share ~ 4200 million INR
11. Daily = 4200/30 = 140 million INR.
12. Total Urban daily revenue: = 172 million INR

So total daily monetary value of the usage:

1. Rural daily + Urban daily = 35+172 = ~ 210 million INR

2. So Surf Excel totaling a value of Rs. 210 million is used in India daily.
3. If you want to find out the quantity, let’s divide it by the average kg price ~ 160
INR
4. = 210/160 Million Kgs ~ 1.3 Million Kilograms per day.

Some more Guesstimates for practice:

1. What is the market size of toothbrushes in India?

2. How many flights does Bangalore/Mumbai/Delhi Airport handle in a day?
3. How many balloons can be packed in an Airbus 380?
4. What is the market size of refrigerators/TVs/Smartphones in India?
5. How many Chocolates are sold in a day in India?
6. What is the market size of Noodles in India?
7. How many idlis are consumed in India in a year?
8. How much paint is required to paint this room?
9. What is the market size of disposable diapers in India?
10. How much biryani is consumed in India in a year?
11. How much toothpaste is used in a day in India?