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2. Market Opportunity
2.1. Target universe
The target universe of this business plan is “people with Internet access and intention of dieting”. Note that the definition of diet right here is “a selection of food for health
enhancement” It includes but is not limited to weight losing. It is based on Chinese medicine diet tradition of balance common here in the Greater China. This App is aim to turn that millenary tradition into a systematic diet plan. This will be elaborated in detail in a latter part.
In order to obtain the size of target universe, we need the data of internet coverage rate, and health related behavior, or in other words, “dieting intention” rate. Assuming these two are statistically independent variables, the market size can be obtained by multiplying the two ratios.
Taiwan Connectivity
PC
Smartphohe Tablet No Internet Access
Figure 2: The illustration of internet users with different device
2.1.1. Internet accessibility
Because of the nature of the App, the target universe is limited to internet users, either they are PC users or smart phone/tablet users. According to the Directorate-General of Budget,
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Accounting and Statistics (主計處),the internet penetration rate is 67.7% at the end of 2010.
7However, if this business starts operation in mid of 2012, its first sales will happen in 2013.
And in order to prepare five year revenue/financial projection, we need estimations of the above data within the five year time span. Fortunately, we know that internet coverage is at a growing trend and is probably reaching its mature stage. Therefore, we assume it will be 85%
in 2015, and it increase evenly in between.
For the rest of the assessment, we will try to find as relevant as data to support it, but for parts that are unavailable, we will use assumptions that are close to common consensus.
Among the vast internet users in Taiwan, we identify the smart phone/tablet users as a group of customers that are easier to accept the concept of this system. One of the reasons is because these users are familiar with Apps. PC users but not smart phone/tablet users have less experience in using Apps and may tend to hesitate more than when they see it for the first time. The other reason is such users are more likely to gain full benefit in using this system.
Giving the fact that, some of the processes are easier to operate on wider screen device, but the interaction and instant feedback with users is a key merit of Apps of this kind. However the latter part is more prone to smart phone/tablet users. Therefore, having one mobile device with smaller screen, and one bigger screen is the best to enjoy the system. Fortunately, most of the smart phone/ tablet users in Taiwan are. Therefore, we expect the acceptance in this group will be higher than the other group – the PC user but non smart phone/tablet users.
For the above reasons, we will separate the two and make assessment respectively.
According to a recent research report from the Institute for Information Technology and the Ministry of Economy Affairs, the number of smart phone users by the second quarter of this year is estimated to be 6.09 million; tablet users 2.32 million, user of either of the two to be
7 http://mag.udn.com/mag/digital/storypage.jsp?f_ART_ID=346254
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7.07 million8. That is 26%, 10%, and 30.4% of the population respectively, meaning 5.7 % of them have both devices.
The same report also estimated that in 2015, smart phone penetration rate is going to be 56.8%, that of tablet is going to be 24%. In order to get the estimation of users of either smart phone of tablet, we need the data of user possess both devices. It is not provided in the article, we will assume it to be 12%, given all the other figures doubled in the estimation. If so, the penetration rate of either smart phone or tablet is 69%. Again, assume this ratio grow evenly from 2012 to 2015. As from 2016 to 2017, the growing rate should slow down. Therefore we use half and quarter of the growing rate for 2016 and 2017 respectively.
2.1.2. Diet intention
From the Nelson survey (2008), we learned that at least 25% of respondents at that time claimed that they are taking action for weight losing. As mentioned our customer base is broader than losing weight purpose, therefore we would arguer to adjust the figure up to 35%.
Also to reflect the growing trend in aging population and health consciousness, we assume that percentage is growing mildly for 2 % each year.
2.1.3. Market size assessment
From the above assumptions, we multiply the device usage ratio, the “dieting intention”
ration, and Taiwanese population, and then we will get the market universe data.
8 http://www.find.org.tw/find/home.aspx?page=many&id=331
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Table 1: The calculation of the target universe
2.2. Similar offerings for this market universe
Though the market is big, the offers are plentiful so competition is severe. The following are other offerings that are not in direct competition with our App, but are similar to us.
Category one Person to Person service 1) Nutrition consultation
For those who are desperate for diet, they are most likely to go for nutrition consultation.
The rationale behind weight losing diet is controlling calorie intake. The process is First;
memorize the calorie contained per unit in each food category. Second; while having a meal, measure the quantity of each food category consumed. Third estimate the calories item by item. Finally sum up the total calorie intake.
In regular nutrition consultation, patients are required measure their calorie intake everyday and send the record to the nutritionist in the duration of the diet period.
The advantage of nutrition consultation is that it is professional, private, and safe. But the weakness is it is more pricy and time consuming as you need to make appointment with the nutritionist every once a while. And the implementation is complicated. Calculating and keep the record is troublesome for many. It is not effective to everyone.
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2) Gym/ beauty center
This category offers solutions other than diet; therefore they are not suitable for direct comparison.
Category two Web based service.
Websites offering related services for free. Their revenue streams are advertisement,
especially for fashion, diet medicine products. Or commissions, if they also introduce clients to third parties.
1)
Online calorie calculating sheetUsing the same logic of calculating calorie intake, some websites offer online models of spread sheets for facilitating calculations. By selecting the food item and quantity, the website tells you the corresponding calorie intake. Since it’s free, the function is simple and incomplete. (Example http//www.scpo.nccu.edu.tw/show/part1/b/B2/food.htm)
2)
Online food diary keepingResearch has proven merely by keeping record of food intake has a positive effect on diet.9 There are some websites offering diet plan record keeping service. The users can keep their record like writing blogs. On these websites, they also provide some simple diet planning services, and analysis on weight changes overtime. (Example
http//www.bdodo.com/?.msg=inc1)
9 The American Journal of Preventive Medicine, August 2008. Pages 118-126.