How E-commerce Startups Can Penetrate a Saturated Market?

May 30, 2023 | E-Commerce

The success of the first generation of e-commerce startups has inspired millions to enter the sphere. Today, if you look on the internet – blogs & discussion forums – it seems every other person wants to open an online store.

In fact, according to a 2014 study, there were between 12 – 25 million online stores running worldwide. And over the past couple of years, this number has grown. This definitely makes e-commerce a pretty competitive and saturated industry. So, it is likely that the niche market you are targeting as a prospective startup already has plenty of established competitors.

Saturation also points to HUGE DEMAND

The situation may seem like a dead-end to most startups, but on the flipside, a saturated market also indicates a huge demand, which means opportunities. And if you can identify these opportunities, then you can certainly gain a good market share. Let’s take an example here to clarify things a bit.

My local town has plenty of restaurants. There is competition between them, and they are fulfilling people’s dining-out needs pretty well. My point is that there is no overwhelming need of another restaurant. Yet, every once in a while I see a new restaurant opening and succeeding. So, how do they do that?

On a closer look, we find that their trick to success is pretty simple – offering something different or better. The same tactic can be used by your e-commerce startup to succeed. Besides, being a technology-based startup gives you more options to get ahead of your competitors.

So, let’s get down to the business and discuss various tricks & tactics that will help your e-commerce startup capture a saturated market.

Build upon the Trend

E-commerce may have already become a saturated sector, but the industry is so dynamic and is going through so many reforms at present that new players can easily secure a place for themselves by capitalizing on the ongoing trends.

The hottest ongoing trend in the e-commerce arena is m-commerce or mobile commerce. People are increasingly using mobile devices for online shopping. In 2015, about 40% e-commerce transactions happened on mobile devices. In Japan and South Korea, more than half of online purchases are done on smartphones and tablets. By focusing on mobile shoppers, e-commerce startups can establish a good standing for themselves in a competitive market.

Enhancing the shopping experience is another area for new players to work upon to capture a market share. Customers are getting used to advanced technology and expect a seamless shopping experience from online retailers. They want more options to pay for their order and expect more automation in the process. By working on these areas, you can certainly attract customers to your online store.

Set Yourself Apart

Customers want options. So, it doesn’t matter how overpopulated your target market is with established brands. If you are offering them something different, they will come to you for sure.

But being different isn’t as easy as it sounds for it requires creativity and commitment. First, you have to figure out what makes you different – quicker delivery, better discounts, more product categories, quicker returns, better product quality, etc.? Whatever sets you apart from your competitors, make it your unique selling proposition (USP) and emphasize on it to get customers’ attention.

If you lack USP, then create one, for you can’t capture a saturated market with a me-too product. As former Coca-Cola marketing executive, Sergio Zyman quoted in one of his books that ‘you can’t sell sameness’.

Apart from that, also create a unique website for your e-commerce startup that makes your online store stand out visually. These are certainly some tough measures that you have to take in order to distinguish yourself; otherwise, your target audience will pay no heed to you and soon enough your startup will be forgotten.

Add Value

How do you capture a market that doesn’t need you? The answer is by adding value to the product or service offered by your competitors. And how do you add the value? By finding out customers’ pain points related to that particular product or service. Here is a million dollar advice on that. Put yourself in the customer’s shoes, and you will definitely come up with ways to enhance their experience. Flipkart’s cash-on-delivery payment option, GrabTaxi’s bike ridesharing initiative, free merchant registration by Taobao, are all good examples of adding value by understating customers’ needs.

Fresh e-commerce startups, who are not dealing with the day-to-day overhead of business management, have a better chance to come up with solutions like these. All they have to do is pay heed to value-added initiatives by big brands, and try to think like them.

Do the SEO


While focusing on improving customer experience is important to make a place for yourself in a competitive market, you should not forget about search engines altogether. After all, in most cases, customers will come to your website after finding you in search results.

It is really important that you pay serious attention towards search engine optimization of your online store. Find out most popular search terms for your targeted niche market, and optimize your website’s content with these terms to appear higher in search results. Also, pay attention to on-site optimization of your online store to get even better ranking in search results.

Additionally, reinforce your SEO campaign with social media and content marketing. These marketing campaigns will also help you in connecting with your target audience and create a greater perceived value for your brand. This will definitely help you stand out in a saturated market.

Choose the Right E-commerce Platform

‘Which e-commerce platform is the best for my online store?’ This is a question that every aspiring e-commerce startup has in mind. As a result, the internet is full of such queries. In the real world, there is no best e-commerce platform but only the best match as per your individual needs.


Choosing the right e-commerce platform may not directly help you in penetrating a saturated market but it will definitely provide you the support you need to act upon the other tips mentioned above. For example, a customizable e-commerce platform will give you the ability to improve the shopping cart experience which in turn will help you attract more customers. Or if the platform is SEO-ready, it will be easier for your store to rank higher in search results.

Therefore, it is important to ensure that the e-commerce platform you are choosing for your online store is mobile ready, SEO-ready, customizable, offers social media integration & other key marketing & customer support tools.


Good news for e-commerce startups is that besides saturation, the e-commerce industry also presents opportunities for startups. As it is the only trillion dollar industry with a growth rate more than 20%. There are over 3 billion internet users worldwide and about 75% of them have done online shopping. These stats clearly show the abundance of opportunities that e-commerce start-ups have in front of them. And if they are ready to proceed in the right manner with the right technique, penetrating a saturated market and achieving success isn’t that impossible a task.

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