Number of Fans in India

C: Sure sir, are we looking at any particular type of fan like ceiling or table? Or should I consider all types of fans?

C: Understood. Breaking the problem down, the 2 types of establishments that we can consider are ‘Residential’ and ‘Commercial’. Since majority of commercial establishments are centrally airconditioned, for simplicity, can we focus only on the Residential aspect for now?

C: So, I’ll try to arrive at an answer by estimating the number of households in across demographics and then multiply them with an estimated no. of fans per household. Can I start with this approach?

C: Assuming the population of India to be roughly 130 Cr, I would first split the population base into 2 major segments ‘Urban’ and ‘Rural’ with 30% & 70% split approximately. Is that reasonable?

C: Assuming the population of India to be roughly 130 Cr, I would first split the population base into 2 major segments ‘Urban’ and ‘Rural’ with 30% & 70% split approximately. Is that reasonable?

C: That translates to roughly 90 Cr people in rural and 40 Cr in the urban segment. Next, to arrive at the number of households, is it safe to assume average family size to be 4 and 6 for urban and rural households respectively? 

C: Perfect! So that gives us 15 Cr rural and 10 Cr urban households approximately. Drilling down further, I would like to segregate these households on the basis of income level - Since it can significantly influence the house size and therefore the number of fans in the household. 

I would like to break it into 3 types of income groups – High, Medium and low. Can I estimate the respective percentages to be 10%, 30% and 60% respectively?

C: Sure sir, based on average no. of rooms in the household, I would roughly estimate the following consumption rates (No. of fans per household) for the respective categories: 

1. High Income (Urban) - 6

2. Medium Income (Urban) - 5

3. Low Income (Urban) - 4

4. High Income (Rural) - 3

5. Medium Income (Rural) - 2

6. Low Income (Rural) - 1

Now, I would multiply the consumption rates (No. of fans per household) with the number of households to arrive at the total number of fans. Shall I proceed with this?

C: I can look at the product lifecycle of a fan (how frequently it is replaced) to estimate a yearly number?

C: Since we have considered the complete population base, I can probably adjust the final number for homeless people and also areas which are not electrified within rural segment?

C: For the sake of simplicity, I would take a 5% haircut on the final number to factor in the above considerations. Is that a fair estimate?

C: Thank you!