Untapped Markets 101: How To Identify an Untapped Market

Identifying untapped markets can transform your business trajectory. For both established companies and those just starting out, discovering underserved customer segments offers a unique opportunity to establish market leadership before competitors arrive. You can find untapped markets by identifying underserved customers or by spotting niche markets that other companies have not yet explored.

Learn how to identify and capitalize on untapped market opportunities.

What is an untapped market?

An untapped market is a segment of potential customers whose needs have not been fully met, or met at all, by existing products and services. These markets exist when companies miss certain needs, often due to blind spots or the belief that serving these new markets isn’t profitable. Businesses that identify and enter untapped segments early can achieve significant business growth before their competitors catch on.

Characteristics of an untapped market include:

• Limited competition. Few or no businesses are serving the market. 

• Unmet customer needs. A gap exists between what consumers need and what’s available. 

• Emerging behavior. New customer habits emerge that other companies have not yet identified.

• Limited visibility. The market isn’t well-researched or studied. 

• Newly accessible. Technological advances continuously create different customer needs.

• Cultural blind spots. Subcultures and historically overlooked groups of people can create untapped markets.

What are the benefits of identifying an untapped market?

Finding an untapped market gives you the advantage of time, which allows your business to establish a presence before competitors enter the space. Early marketing campaigns can establish you as the go-to brand for consumers, which is harder to achieve once the market is saturated. If you are running an established business that’s trying to grow, finding an untapped market can offer you fresh revenue streams. Early entry can also offer growth potential for the future if the market is predicted to expand.

How to identify an untapped market

• Watch for trends in niche markets
• Pay attention to your own pain points
• Look for interesting products in other regions
• Track consumer behavior to uncover unmet needs
• Look where others are unwilling to look

Finding untapped markets starts with paying attention to overlooked needs and demographics—and even your own frustrations. Here are some strategies for how to spot profitable opportunities:

Watch for trends in niche markets

Trends don’t typically start on the front pages of newspapers. Finding untapped markets starts with thorough market research. The latest thing often begins in corners of the internet where groups of people passionately discuss specific needs or interests. Dig through active subreddits, follow Instagram hashtags, and train your TikTok algorithm to tap into industry niches to identify untapped market opportunities that overlap with your existing business model.

If you’re looking for an entirely novel idea, narrow your search by looking for shopping trends in niche markets, such as sustainable cleaning products, specialty pet toys, or fitness equipment. These communities may be small, but they’re often highly engaged, which creates a valuable opportunity for companies. Westside Barbell is one example of a fitness ecommerce website that serves a specialized target market: bodybuilders. It sells a variety of products, including bars, chalk, books, and coffee, that cater to a multibillion-dollar audience that’s serious about physical performance.

Pay attention to your own pain points

Some of the best ideas come from problems you experience firsthand. If you’ve ever thought, “Why hasn’t someone made this yet?” you might be the perfect person to fill that gap. Personal frustration often signals a market gap in current business models that other consumers are likely experiencing too.

Your own frustrations can lead you directly to an untapped market, especially if you’re part of a larger community facing the same issue. For example, if you’re dissatisfied with the menstrual products on the market, it’s safe to assume you aren’t the only one in a group of billions of people.

Many successful companies gain an advantage by beginning this way. Fur, a multimillion-dollar brand focused on care for pubic hair, was born from personal experience. “It really comes from personal need,” says co-founder Lillian Tung on an episode of the Shopify Masters podcast. Her co-founder, Laura Schubert, searched high and low for intel on pubic hair care and found nothing. “At that time, pubic hair care meant only one thing, which is removing it,” Lillian explains. The two entrepreneurs identified this market gap and developed a successful business around it. 

Look for interesting products in other regions

Sometimes an untapped market isn’t about inventing entirely new products; it’s about bringing an existing innovation or technology to a new target market. When Gillian Gallant first saw Paper Shoot Camera on TikTok, she knew it could be a hit in North America. “Whenever I saw a TikTok video, it had been somebody that had gone to Asia and purchased the camera,” Gillian tells Shopify Masters. The camera, invented in Taiwan, is a simple digital point-and-shoot that works like a disposable camera but without the need to buy or develop film. Gillian recognized high demand without local access, prompting her to contact the camera’s inventor to secure exclusive distribution for North America.

Paying attention to what’s trending, not just in your region but also in other countries around the world, can help you capitalize on products and services that are already successful. 

Track consumer behavior to uncover unmet needs

Instead of relying only on feedback forms, track consumer behavior to see where demand is building, so you can allocate your resources effectively. Look for products that are consistently sold out, something people have to buy overseas, or a newly popular item that may reveal something about shifting market demand. Gillian discovered a key insight by noticing the popularity of a similar product. “We started an Amazon business,” she says. “One of the most popular things we were selling was disposable Kodak Fuji cameras. It was definitely coming back as a trend.”

This allowed Gillian and her business partner to recognize the popularity of Paper Shoot Camera in North America. She admits that if they hadn’t first had success with selling disposable cameras, they might not have been able to see the potential as clearly.

Look where others are unwilling to look

Some of the most promising untapped markets exist because people intentionally avoid them, often out of discomfort. Fur’s co-founders recognized this when they broke the taboo around pubic hair care, an everyday need that the beauty industry had neglected.

“We were laughed at all the time,” Laura recalls of Fur’s early days. “We were kicked out of stores.” But careful planning and clever marketing campaigns played a crucial role in Fur’s success. “PR was a great investment for us at the start because we didn’t want to be a joke,” she says. “We were introducing products and creating a taboo category, and we knew we had one chance to get it right.”

By filling a gap that potential competitors were too hesitant to address, Fur tapped into a market segment with significant purchasing power, expanding its reach in ways that others had ignored.