7. Market size matters

Summary

Given the complexity of the buying decision for container based sanitation (CBS) (see Building Block 5), and the challenge of finding a sufficient number and density of working poor households that are willing and able to pay for the privilege of in-home sanitation, market size really matters. If CBS were delivered as a tendered service to a municipal authority (see Building Block 8), very high customer densities could be easily achieved (say 40% to 50%). A standalone, unsubsidized enterprise is more likely to establish a smaller market share of 10% to 20%. That necessarily means finding larger markets.

Building on the critical success factors for contained based sanitation businesses detailed in Figure 4, EY developed an assessment tool to judge the potential viability of the CBS model in new markets. Coupled with this, EY also undertook a high-level assessment of more than 20 of the world’s largest informal urban populations across Asia, Africa, and Central and South America to gauge how many of these markets might support unsubsidised CBS enterprises (see Figure 5).