Did you know that there are over 12 million eCommerce businesses thriving in the retail marketplace? That’s 12 million entrepreneurs brandishing their unique products and brand identities among 2 billion online shoppers. And it all began with a niche.
This article looks at the trending eCommerce niches exhibiting the most potential for growth this year and in the coming times.
All about eCommerce Niches: Meaning and Value
Niche is a specialized segment of the market containing products or services that appeal to a dedicated subset of the population. In other words, niche is a sub-category within broad industry segments that have a committed customer base.
If you have a niche category in business, it opens up many closed doors. Take, for example, beauty brands- E.l.f. Cosmetics, The Lip Bar or the PYT Beauty.
These brands have established their names in the highly competitive beauty industry, where stalwarts like Fenty and Maybelline prevail. Their secret to thwarting massive competitors lies in the fact that they operate in a specific niche category- vegan beauty products! These are well-known names in the industry thanks to their specialized business component.
10 eCommerce Niches with the Most Growth Potential
1) Natural Beauty Products
Beauty products have always had a market since times immemorial. From precious oils to perfumes, eye shadows to rouge, beauty merchants were ever present in both the East and the West. But what’s changed in 2023?
The niche market in the beauty industry has evolved to embrace, expand and propagate the mantra of ‘cruelty-free’ and ‘chemical free’ products. Since the dawn of the pandemic era, consumers have grown health conscious. And nothing appeals to them more than ‘natural beauty products’ with the added charisma of ‘vegan’ stock.
The worth of the natural cosmetic industry was estimated to be $33.4 billion back in 2020. Now, it has been projected to be worth $56 billion in 2030. With a steady rise in revenue share, it is plausible to assume that new entrepreneurs selling vegan cosmetics can leave an indelible mark in the industry. Popular vegan bases include tea extracts, rice, and vitamin C.
Creating natural products is not a daunting task; neither is testing them. If you are a U.S. entrepreneur, you can easily find the FDA regulations to understand the production requirements and safely market your products.
2) Menswear and Grooming Products
Did you know that there is a niche market for men’s beard oil? In fact, searches for this product alone have steadily continued to grow in the last five years. It’s a classic example of a niche category that creates untapped opportunities for companies like Old Spice Barber Shop.
Women’s grooming has been blooming in the past several decades, but the men's segment was less saturated. But 2023 is different in terms of niche. The niche categories of men’s grooming products include products like hairstyling products, moisturizers, post-shave mist, face masks, etc. It is estimated that this niche will grow to around $110 billion by 2030.
Similar to men’s grooming needs, their apparel wear has shifted dramatically in the past ten or so years. The result can be seen in the many D2C brands that have emerged in the apparel industry like Bonobos. From fedora hats to sport coats, the menswear niche accommodates all styles and customizations.
3) Subscription Models
If there is one trend in eCommerce that’s continued to thrive pre and post pandemic it’s subscription-based eCommerce model. Subscription businesses epitomize convenience in purchasing and receiving products or services. Perhaps this is the reason why businesses can create any niche in subscriptions as long as they follow the principle of customer satisfaction.
Take the case of Sakura. It's a Japanese subscription box company that sells both authentic as well as funky-unique-to-Japan snacks and sweets. Or Swanson Vitamins which offers natural health supplements and vitamins. Or Birchbox, which presents beauty product samples to women aged 25-39. The list is quite endless.
Subscription business is estimated to be a whopping $ 904.2 billion segment by 2026. Because they curate products and services according to the preferences of the target audience, they make a lucrative niche business model. On-demand subscriptions are a sub-niche of this category that’s particularly active in digital assets like video streaming.
4) Home Decor and Office Supplies
COVID-19 has entrenched the need to upgrade the empty spaces in our house into bul-blown office setups. At the same time, it has tickled our creative sensibilities to start remodeling homes in ample spare time. Naturally, the market demand has given birth to a niche in home decor and office supply products.
While IKEA popularized the niche of do-it-yourself furniture assembling, now there is a drift towards ergonomic designs and noise-cancellation systems. The marriage of social media and online shopping has gifted us many new niches.
Take for example, boucle furniture. This heavy, often muted upholstered furniture has taken TikTok, and online consumers by storm. This exploding home furniture niche has over 22,000 searches each month.
Home decor segment has a low barrier to entry, allowing small startups to bring any product they choose to their audience. The rising popularity of home-made scented candles, bees-wax wrappers, and home-made toys are a testament to this. In fact, home decor is a good niche to start a dropshipping business. This niche is valued at $805.75 billion by 2026.
Re-commerce is a step towards repurposing and reusing products, and nods to the mantra of sustainability. It has grown into a profitable niche for brands looking to sell previously owned products at affordable prices. It is not only a smart business idea but a perceptive way to position your business in the global inflationary economy.
Re-commerce is a niche that supports the idea of thrifting and a model that digitizes thrift shops as online stores. One of the most remunerative niches in re-commerce is apparel re-selling. The idea can extend to other product categories like books, music gear, sports gear, baby clothes and toys, and even jewelry.
There are already well-known marketplaces prevailing that accommodate and support re-selling like eBay and Craigslist. However, you can set up your storefront following the likes of StockX (for sneakers) and RealReal (home decor and accessories). Hopping onto the bandwagon of re-commerce now can pay off in 2026 as the niche is expected to surpass $200 billion.
6) Pet Products
It has been a decade since pet-products grew to be a prominent eCommerce segment. Now this category is witnessing some interesting developments turning them into evolving niches. Like the cannabis pet supplement products that grew into prominence for helping pet parents care for the health of ailing furry friends.
Another niche category in the making is homemade pet treats. These pet products especially meet the needs of pups and range from baked treats to solvents. Usually, the treats are made with natural ingredients making pet food increasingly healthier and organic.
A second niche is pet grooming products. With more resources invested in R&D, brands are cropping up with super niches like pet toothpaste and wipes. Another example of technologically advanced and sustainable pet niche is wifi connected, self-cleaning litter box.
At the same time, the market is witnessing a steady growth in luxury pet goods. Brands like Pretty Litter and The Bear & The Rat markets high-end litter boxes and frozen yogurt have gained a firm ground in the industry. If you are an animal lover, finding a niche in the pet industry can be an excellent way to launch your business off.
7) Eco-friendly Products
It's been a good couple of years since the world is conscientiously pivoted around eco-friendly and sustainable principles. Sustainable commerce is not only a sub-category in eCommerce but an ideology that's shaped how and what businesses sell. For example, the niche of bamboo-based baby grooming products like spoons, tumblers and pajamas.
The proliferation of eco-friendly brands is the result of direct customer demand for products that are sourced ethically and have the least bit of environmental impact. Research shows that 90% of GenZ consumers are willing to pay 10% extra for sustainable products and services. Thus you can lean on innovative ideas without restrictions of price constraints.
Eco-friendly category leaves a lot of room to think and develop any product that fits the bill of sustainability. This already niche like silicon based menstrual cups or reusable pads in period products. Or, insect-based pet products. Or, reusable natural cloth diapers.
A special niche that is gaining quick ground in eco-friendly products are potted plants. From potted fruit trees to flower bulbs, easy-to-care plants to rare, designed ones, this niche is predicted to reach $20078.83 million by 2028.
Kitchenwares are not merely an extension of home decor anymore. Since the pandemic days, there has been a steady rise in people’s cooking and baking habits. This served to create a niche that takes care of cooking and baking supplies companies like the Food Huggers.
The popularity of kitchen supplies rests on the fact that there is a diverse consumer pool, from total beginners to Masterchef’s. This is why niche products range from cookie cutters to potato bags. Things that prove useful to all. Another rising sub-category is kitchen gadgets including tools like smart dishwashers and electric composters.
Jewelry has always been a competitive industry. Much like beauty products, they have been in circulation for centuries now. But the rise of eCommerce brought a new edge to the industry.
According to some market research, the online jewelry segment is on its way to reaching $92.7 billion by 2023. The online market overwhelmingly promotes our love for shiny things in high-end fashion and traditional gold/diamond/silver jewelry. However, many niches are evolving and asserting themselves over the past five years.
Examples include gemstone jewelry, signet rings, decadal charm necklaces and now paper jewelry. A booming niche that continues to unlock a decent year-on-year growth rate is handcrafted jewelry.
Handmade jewelry crafters have continued to shift towards natural stones and organic materials. The latest developments abound in materials like shells, wood and semi-precious stones.
10) Digital Educational Content
Digital assets like educational content serve as a reminder that eCommerce is not only about tangible products. The pandemic raised legitimate concerns about children and youngsters falling back in education all over the globe. The rise of digital educational courses only serves to fill this gap.
The online learning model has been persistent for over a decade now, with online platforms like Coursera, Udemy, Edx, and Linkedin leading. Remote, hybrid learning that sells on personalization and catalog courses is a good niche to look into in 2023.
Moreover, with the dawn of AI tools, the market is quickly filling up with curated content that is teaching people how to use them efficiently. Quick 3 to 6-month certifications and upskilling courses like graphic design or web designing have gained traction. At the same time, some are focusing on creating micro-learning courses that can be completed within hours.
Some of the persisting niches in this area include language courses (think of Duolingo), coding classes (that you can float on YouTube), and photography tutorials (you can market it on SkillsShare). The online education market is said to be rising unwaveringly at a CAGR of 10.3% and is estimated to be worth $457.6 billion by 2026.
Why Should Businesses Sell in a Niche?
A niche creates the space for a company to differentiate their products and signal their brand identity amongst thousands of others. Yes, there will always be competition within your niche category, but it limits it to a small percentage.
Here are some of the best benefits you get for starting a niche business:
- With a highly concentrated customer base, having a niche lowers the cost of advertising to wider, potentially uninterested masses.
- It's relatively easier to firmly and quickly build a loyal customer base with distinctive products. The rest depends on customer retention.
- Niche brands sell specialized or specific products, so direct competition for that category remains low.
- Niche products can be positioned to be charged a little high as it's difficult to find a standard substitute for them.
Having a niche is a great way to set yourself apart from the masses. Niches are areas that fewer people have invested in. So the opportunity of doing something truly unique and establishing a strong brand presence is a strong possibility. For beginners, niches are an excellent way to start a dropshipping business or curate a special nook in the over-saturated eCommerce market.
1) What is the fastest-growing eCommerce niche?
The fastest growing eCommerce niche is reserved in the beauty and wellness industry where brands are increasingly developing natural-based and organic products. Another competing niche is the online food delivery and on-demand grocery segment.
2) Which eCommerce niche has low competition?
Niche with low-barrier entries and low competition includes specialized pet grooming or pet food products, online pet training, vegan products, glamping supplies, home-improvement tools and van-life supplies.