Market Sizing Questions: A 5-Step Method With European Examples

What is a market sizing question?

A market sizing question asks you to estimate the size of a market, in units or money, without data and usually without a calculator. Estimating annual bicycle sales in the Netherlands is a typical prompt. It can stand alone in a first-round interview or appear as one step inside a larger case, for example before deciding whether a market is worth entering.

The interviewer is testing three things: whether you can break a vague question into logical parts, whether your assumptions are reasonable, and whether you do the arithmetic cleanly. McKinsey's official guidance states that there is no single correct solution to its cases, and market sizing is the purest example. Two candidates can reach different numbers and both pass.

Top-down or bottom-up: how to choose

Top-down starts from a large known total and narrows it: population, then the share who buy, then purchases per buyer. Use it for consumer products where the population is the natural base.

Bottom-up builds the total from units of supply: outlets x customers per outlet, or machines x output per machine. Use it for B2B markets, local services, or anything sold through a countable set of locations.

When time allows, build with one and cross-check with the other. If the two land within a factor of two, your estimate is probably sound.

Five steps from prompt to sanity check

1. Clarify the question. Pin down geography, period, unit (units or EUR) and scope. "Bicycles" might include e-bikes and children's bikes; "sold" might mean new only.
2. Choose the approach and draw the tree. Write the equation before any number: annual sales = bikes in use / years per bike x share bought new. Keep it to three to five drivers, each separate from the others (the MECE guide explains the test).
3. Assume out loud, with round numbers. Give a one-line reason for each assumption. Round to numbers you can multiply in your head.
4. Calculate step by step. Announce each intermediate result. Track zeros with scientific notation, as the case interview math guide shows.
5. Sanity-check and conclude. Test the result against a second angle or a known fact, state the answer with its unit, and name the assumption that matters most.

Stephan's note: A simple test for any estimate: the interviewer should be able to trace every number back to an assumption you said out loud. If a figure appears without a reason, stop and give it one.

Benchmark numbers worth memorizing

A few anchors save time and make your assumptions credible. All figures below are rounded from official statistics.

Worked example: annual bicycle sales in the Netherlands

Prompt: Estimate the number of new bicycles sold in the Netherlands each year.

Clarify: new bicycles only, all types including e-bikes and children's bikes, units per year.

Approach: bicycles are durable goods, so estimate the number in use and divide by how long a bike lasts, a standard method for durables. Then remove the share of replacements that are bought second-hand.

Sanity check 1, bikes in use: KiM, the Dutch government's transport research institute, cited about 23 million bicycles in its 2018 Cycling Facts. The 21.4 million estimate is about 7% low.

Sanity check 2, usage: CBS reports that people aged 6 and older cycled about 1,065 km each in 2023. With roughly 17 million people in that age group, that is about 18 billion km a year, or about 840 km per bike (18 billion / 21.4 million). Over a 10-year life, each bike covers about 8,400 km. Both figures are plausible.

The real number: a NielsenIQ study for the Dutch trade bodies RAI and BOVAG counted about 796,000 new bicycles sold in 2025, the lowest level in 40 years according to Bike Europe, and about 858,000 in 2024. The estimate of 1.07 million is about 35% high against 2025.

The gap is instructive. The weakest assumption is the 10-year lifetime: e-bikes, now about half of unit sales, are expensive and kept longer. Raising the lifetime to 13 years gives about 820,000 (21.4 million / 13 x 50%), within about 3% of the market. In an interview, naming that assumption as the most sensitive one is worth more than hitting the number.

Worked example: coffee cups sold at Dutch train stations

Prompt: Estimate the number of cups of coffee sold at Dutch train stations each year.

Clarify: cups sold by any outlet inside stations, including kiosks and vending machines, per year.

Top-down build:

1. NS reports about 1.1 million train trips per day in 2025.
2. Assume 12% of trips include a coffee bought at the station. Morning commuters buy most of them; leisure travelers and short hops buy fewer.
3. 1.1 million x 12% = about 132,000 cups a day from travelers.
4. Add 10% for non-travelers (people meeting someone, station staff, shoppers): about 145,000 cups a day.
5. Times 365 days: 145,000 x 365 = about 53 million cups a year.

Bottom-up cross-check: assume about 400 stations. Suppose 20 large stations host about 10 outlets each at 300 cups a day (60,000 cups), and the remaining 380 stations average 200 cups a day (76,000 cups). That gives about 136,000 cups a day, within 7% of the top-down figure, so the order of magnitude holds. The station count and cups per outlet are assumptions to state and test with the interviewer.

Answer: roughly 50 million cups a year. At about EUR 3.50 a cup, that is a market of about EUR 185 million (53 million x EUR 3.50).

Common errors and how interviewers react

• Jumping to numbers before the tree. Interviewers often interrupt and ask for the structure first. Draw it, then calculate.
• Unexplained assumptions. A number with no reason invites a challenge. One clause of justification prevents it.
• Zero errors. A factor-of-ten slip is the most common fatal mistake. Write magnitudes explicitly and check them at every step.
• Skipping the sanity check. Interviewers frequently ask whether the number feels right. Have your second angle ready before they ask.
• Defending a bad assumption. When challenged, adjust the driver, recalculate and move on. Flexibility scores; stubbornness costs.

Practice with the market sizing prompts in 20 original case interview questions, see how sizing opens a full case in the McKinsey case interview guide, and place it in the wider interview with the complete case interview guide. Cracking the Case covers guesstimates in its own chapter, with four principles and the pitfalls to avoid.