1. Penetration estimation by using WDIRC

1.1 Penetration with years

What is the penetration of WDIRC apparatus in markets? That refers to the successful selling of a WDIRC apparatus in market A, B and C. It is measured by the amount of sales volume of a sold WDIRC product compared to the total target in the market. Here we show you the prediction by Table 1A and B in market A, B and C. Two type penetrations such as YearPenetration (YPenetration) and CumulativePenetration (CPenetration) to be presented in the Table 1A; Equation (1) shows the formulation for calculating the market penetration ratio by year. For example on the first year in market A, on this year, we sell 97,155 sets in the market A which includes 531,790,136 households, then the ratio of YPenetration is about 183 ppm to be calculated by 97,155/531,790,136. Moreover, we also calculate the cumulative penetration by the cumulative sales. For instance, on the second year in market A, the cumulative sale is 369,239, and we can get the CPenetration as 694 ppm by 369,239/531,790,136. What is the difference between YPenetration and CPenetration, as we know, WDIRC isn’t a consumer electronic, and so when a low CPenetration exists in a market that means we have much more opportunities to sell this product into houses without substitute issues. In other words, no problems on trading new good for old, but there are problems on reputation, market access, accessibility, and marketing etc… However, even by our estimation at the end of ten years later, CPenetration is 18,640, 4,022 and 3,601 ppm in market A, B and C, respectively. The totally Cpenetration is estimated as 11,162 ppm and the ratio is still low by this. So from the viewpoint of supply and demand, the demand from markets is still strong even ten years later. Equation (2-5) are the regression model for using to predict the YPenetration, by this the sale can be estimated in market A, B and C, and we can adapt market strategies due to the sale volume. Fig. 1 shows the year penetration estimarion for using WDIRC in markets.

Eq. 1 Penetration ratio = customers / size of target market

Eq. 2 YPenetration=378.32*Year-216.79 (R2=0.9962) in MarketA (unit:ppm)

Eq. 3 YPenetration=67.826*Year-29.148 (R2=0.9766) in MarketB (unit:ppm)

Eq. 4 YPenetration=63.381*Year-11.507 (R2=0.9885) in MarketC (unit:ppm)

Eq. 5 YPenetration=219.99*Year-93.709 (R2=0.9974) in MarketABC (unit:ppm)

1.2 Cumulative penetration with years

We also calculate the prediction of cumulative penetration with years. Equations 6 to 9 are the estimations for predicting the ratio of sold WDIRC in markets. They are a function of exponential by time. From the Figure 2, the dominant of growth is in market A we seen. CPenetration in market A presents a higher number than the average of market B and C obviously. We see the rapid growth in markets, a lot of deals or buyers to buy this product during this period via on-line or off-line markets in these three areas. This decade it initiates the market effects on selling of WDIRC apparatus, e.g. the number of cumulative penetration in market A reaches to 18,640 ppm (1.864%), after ten years later the owner ratio is still low in markets. If we put more resources on marketing, the sale and revenue will increase more than this prediction.

Eq. 6 CPenetration=176.35*Year^2.022 (r²=0.9998) in MarketA ( unit:ppm)

Eq. 7 CPenetration=46.963*Year^1.968 (r²=0.9971) in MarketB (unit:ppm)

Eq. 8 CPenetration=43.489*Year^1.939 (r²=0.9987) in MarketC (unit:ppm)

Eq. 9 CPenetration=110.2*Year^2.01 (r²=1.0 ) in MarketABC (unit:ppm)

2. To estimate the selling amount of WFR through IOT-EC system

Regarding the sale of WFR, it needs to depend on the sale of WDIRC apparatus due to the used by WFR for cooking. Therefore the basis of estimation, it bases on the prediction of WDIRCs’ selling and the consumption of rice, the statistical data of rice consumption collected from FAO (Food and Agriculture Organization, United Nation). We set the online selling of WFR on first year to be the baseline for calculating their growth rate. Eq. 10 is the formula for calculating the buying rate of WFR on first year; it is equal to the multiple of population, rice consumption, using ratio of WFR, online buying rate and sharing ratio of market. For instance, in market A, the online selling of WFR is 755,447 kg which estimated from the summation of market A which included China, Japan, South Korea, Taiwan, and Hong Kong. Table 2 is the result of estimation of online selling WFR. The trend can be estimated by Eq. 11, and its r² (correlation coefficient) is 0.9969. Till reach the end of ten years later, the growth rate (G.R.) will be 81.61, 46.37 and 37.54 times the first year in market A, B and C, respectively. Totally the growth rate (T.G.R.) of selling WFR will approach to 64.43 times the first year. Fig. 3 shows the selling curve of growth with year. It’s a linear regression, and can be predicated by equation (11), its correlation coefficient R² is 0.9969, and it means the prediction is very precisive.

Eq. 10 WFRBuying = Population * RiceConsumption * WFR ratio * OnLineBuyingRatio* MSharingRatio

Eq. 11 RiceSales=9M*Year-9M (r²=0.9969)

Moreover, if we see the rate changed on growth, the estimation can be shown in Fig. 4, and the estimation equation is shown in Eq. 12. According to this prediction, the growth rate will increase 6.899 times per year in market ABC on selling WFR. In other words, ten year later, the increment of WFR sale will be great than the first year by 64.43 times.

Eq. 12 GrowthRate=6.899*Year-6.481 (r²=0.9969) in MarketABC

3 Income from selling washing-free rice by IOT-EC system

To analyze the revenue from selling WFR by IOT-EC system, what factors affect the estimation that we need to consider, as we know the sale of WFR and its selling price in markets are the primary parameters. Therefore this prediction of revenue by selling WFR is based on the amount of WFR. If the average of selling price of WFR is one USD, the revenue estimation can be shown in Table 3. Here shows the change of online selling amount and revenue with years, for example, on the first year the revenue in market A, B and C is $755,447, $178,947, and $124,110, respectively. Totally in market ABC there revenue and profit are $1,058,504 and $105,850, respectively. The tendency within ten years is shown in Fig. 5, and the prediction is also shown in Eq. 13. The increase (slope) is 8 million USD per year in market ABC by selling WFR; this increment will depend on the market share of WDIRC in markets, the culture of rice cooking, the operation of IOT-EC, and the selling price of WFR. As we think, with the time, the slope will increase more rapid due to the fast development on information and science technology in our living environment. Therefor the income earned from WFR selling will be over our prediction more.

Eq. 13 YearRevenue=8M*Year-7M (r²=0.9963) in MarketABC

4. Totally revenues and profits by selling WDIRC and WFR

By this proposal, we also estimate the revenue included both selling WDIRC and WFR sale, the result is shown in Table 4. In this table, the estimation to be done is according to the growth from each market with years. Normally the selling of WDIRC is a primary income, but with the years the selling revenue of WFR will also increase, and the ratio of WFR:WDIRC will enlarge with years. When the ratio of penetration of WDIRC reaches to a steady state, most people can accept this kind of cooking devices with WFR using, and then the revenue from WFR selling will gradually be an important part in totally revenue. The revenue from WFR selling can be used to maintain our operation and management system, and has an opportunity to develop an online consuming community with information technology, since the forming of consuming community; we can collect and analyze the behaviors from consumers and use this kind of data to deploy other EC applications for extending the revenues. In the other words, the transaction model will be changed from the real economy to the membership economy. This is an important step for us to manage or operate this system. Most of our customers who buying WDIRC or WFR will transfer their consuming style via our IOT-EC system, for example, based our system we can sell the matters such as cooking material, tableware, cooking device, and even health care things. All of member economy can be done by this system to make an extra income; therefore as our estimation, the benefits will be over this prediction more. The estimation equation and growth curve are shown in Eq. 14 and Fig. 6, respectively. Based on the prediction, the increment per year will be 80 million USD that included WDIRC and WFR (2W) incomes. The ten year later, the total revenue and profit of both are 750,339,963 and 230,254,976, respectively.

Eq. 14 TotalRevenue=80M*Year-40M (r²=0.9981) in both revenue

What’s the prediction made for profits included WDIRC and WFR incomes, the profit estimation to be made by Eq. 15, and its growth curve is shown in Fig. 7. Generally, the profit will approximately earn for 20 million USD per year from market ABC. It will share for about 25% of revenue. Most profit comes from WDIRC selling, but we can’t ignore the profit earned from WFR’s selling and other service benefiting. Finally we hope at the end of ten years, there are about 230.25 million USD per year earning from market ABC.

Eq. 15 YearProfits=20M*Year-10M (R²=0.9971) in both profits