Niche market – "big door" for businesses

(Baonghean.vn) - A young Vietnamese businessman on a trip to the US noticed that many wooden poles with road signs appeared along the avenues his car passed. He asked his American friend who was traveling with him and was told that they were imported at a rather expensive price from a Latin American country.

Rice export. Illustrative photo, source from Internet

The story ends with the signing of a serious international business contract worth millions of dollars; according to which, the Vietnamese businessman will provide the American partner with bamboo poles from Vietnam according to the agreed specifications, at a much cheaper price and more durable than wooden poles which are both expensive and more susceptible to rotting... This young Vietnamese business also came up with a way to pay very high salaries (and calculate bonuses as a percentage of net profit) to a number of young associates who are dedicated to "scouring" the internet and market news, collecting and processing necessary economic information... to find attractive business opportunities from niche markets that few people pay attention to.

In the modern world, international integration, division of labor and cooperation are developing both in breadth and depth, successful enterprises are often organized in the form of joint stock companies, participating in value supply chains and network business. Even the largest enterprise in the world cannot produce 100% of components and spare parts for its products. The American aircraft company Boeing orders the production of thousands of components from hundreds of other enterprises in dozens of countries around the world to have its finished aircraft. In that context, niche market is an open concept for different products, services and for enterprises of different sizes, levels and business capacities.

It could be a potential segment of goods and services that has not been exploited, or is operating on a small scale, easily replaced by similar types, with little competition and outside the "coverage" of national and international "enterprises - giants". But it could also be the need for a detail or stage of production - supply and consumption of a certain product or service as an integral part of a complete chain of goods and services that are the business objects of large enterprises....

In fact, niche markets always exist side by side with large markets. They may mean nothing to this business, but they are the whole career of another business that prefers "small cats catching small mice". Niche markets also move and change constantly, sometimes arise, sometimes saturate and sometimes die, but they are always open, "everywhere" for entrepreneurs and businesses who know how to look, listen and understand, are sensitive and sophisticated. That is, in the picture of the world of myriad shapes and forms of modern goods and needs that are always changing, small and medium enterprises always have the opportunity to join the common playing field through niche markets to "fill the market gap", cooperate and link or compete directly with cheaper, better, more unique, more convenient alternative products according to their superior comparative advantages and unique creativity; from producing car inner tubes or round wooden cushions for the driver's seat for a famous car company; or setting up a specialized group to mow the garden, clean and move houses for rent, etc.

It can be said that, both in the short term and in the long term, along with the development of the opening process, deep participation in integration and globalization, the expansion and development of niche markets are the playground and opportunity, the big door of prospects for Vietnamese small and medium enterprises to participate and integrate into the global supply chain and added value of the 21st century...

To exploit business opportunities well, even in niche markets, small and medium enterprises need to be proactive and dynamic in grasping market movements and reactions, flexible in strategies, investment plans, ways of organizing and managing businesses, attach importance to developing marketing departments, design, risk management; in particular, cannot ignore the "rules of the game" of the market, especially ensuring requirements on origin, quantity and stable quality of goods, seasonality and fast delivery time, cheap prices, after-sales service, attentive customer care; at the same time, do not forget to register trademarks, as well as comply with specific, characteristic and important regulations for each market.

For example, to avoid Vietnamese businesses' products being returned and having difficulty entering the US market, the most important thing is that businesses need to register for an ADUNS code provided free of charge by the US. This code is to prove the existence of the company and the origin of the goods, as well as help partners around the world know that you are a trustworthy business. The US is the world's largest import market, with a large, multi-ethnic population, so tastes are extremely diverse; average income is high, and people have a habit of shopping a lot.

Therefore, Vietnam has more motivation and a wider path to enter the US, even through niche markets.

TS NNguyen Minh Phong