By 2023, the European Union’s €16 trillion GDP, is considered the third-largest economy in the world and accounts for one-sixth of global trade, according to Visual Capitalist. By this count, the GDPs of Germany, France and Italy make up more than half of the EU’s entire economic output. The UK, which formally left in 2020, would have been the second-largest economy in the region at €3.4 trillion. Spain contributes €1.4 trillion, 8% to the total EU output.
Spain is an attractive market for international businesses due to its large population (46.8 million), and strategic location. The country has a diverse and growing economy with opportunities in various industries. The Spanish market can be highly competitive, but there are still untapped niches that businesses can capitalise on. In this article, we will explore how businesses can identify and take advantage of these untapped or underserved niches in the Spanish market.
Identifying untapped or underserved niches
To identify untapped or underserved niches, businesses need to conduct extensive research. They can use a combination of primary and secondary research methods to gain insights into the market. Primary research methods may include surveys, focus groups, and interviews with potential customers, while secondary research methods may include market reports, industry analysis, and competitor analysis for example.
Businesses can also look at the gaps in the market and identify areas where there is a demand for products or services but no suppliers are offering them. This could be due to various reasons, such as regulatory barriers, lack of technology, or cultural differences.
Changes in legislation and consumer trends can create market opportunities for businesses.
Changes in legislation
Changes in legislation can create market opportunities for businesses by opening up new markets, reducing barriers to entry, or creating new regulations that favour certain industries or business models.
For example, the legalisation of cannabis for medicinal or recreational use in Spain creates opportunities for businesses to enter the cannabis industry. This change in legislation opens up new markets and reduces barriers to entry for businesses offering a range of cannabis products or services, such as cultivation, distribution, or retail.
Another example is the recent EU directive on single-use plastics, which creates opportunities for businesses to offer eco-friendly alternatives. This change in legislation creates a new market for businesses that offer sustainable products or services, such as biodegradable packaging or reusable products.
Changes in consumer trends can create market opportunities for businesses by creating demand for new products or services, or by shifting consumer preferences towards certain industries or business models.
For example, the growing trend towards health and wellness consciousness brings about a huge opportunity for businesses to offer products or services that promote health and well-being. New business models flourish by offering a range of natural and organic products or by providing services such as yoga classes, meditation, or fitness training.
Another example is the growing trend towards sustainable living, which creates opportunities for businesses to offer eco-friendly products or services. Businesses can capitalise on this trend by offering sustainable products, such as reusable bags or water bottles, or by providing services such as recycling or waste reduction.
A good example of sustainable living business model is Bike Ocasion, an €8 million turnover (2022) and Barcelona based firm, that has identified and capitalised on an untapped niche. The company specialises in buying and selling second-hand bicycles and bicycle parts, offering affordable and eco-friendly transportation options to the local community.
Bike Ocasion has identified a gap in the market by offering a unique value proposition that resonates with customers who are looking for affordable and sustainable transportation options. The company has successfully differentiated itself from larger bicycle retailers by offering high-quality and affordable second-hand bicycles, as well as personalised and knowledgeable customer service.
Another interesting trend is the rapidly growing online psychology services, a growing field that involves mental health professionals offering counselling and therapy sessions to clients over the internet through video conferencing, instant messaging, or email. Online psychology offers clients the convenience of receiving mental health services from their own homes, with greater flexibility in scheduling. Some brands taking over this niche in Spain include Betterhelp, Buencoco, and Terapify.
Untapped or underserved niches
Health and wellness
The health and wellness industry is growing rapidly worldwide, and Spain is no exception. There is an increasing demand for natural and organic products, as well as alternative health therapies. For example, a company could offer fitness classes, nutrition coaching, or wellness retreats. Alternatively, a business could offer natural and organic food products, supplements, or personal care items. Another way businesses can promote health and well-being is by implementing wellness programs for their employees, such as providing gym memberships, healthy snacks, or mental health resources.
Sustainability is a growing trend in the fashion industry, and Spanish consumers are increasingly conscious of the environmental impact of the clothes they wear. There is a gap in the market for sustainable fashion brands that offer stylish and eco-friendly clothes. A business can ride this wave by offering a range of sustainable fashion products, such as clothes made from organic cotton or recycled materials. The company can also promote its sustainable practices, such as using renewable energy or reducing waste.
PersiSkin, is an excellent example of how collaboration and innovation can help businesses bring breakthroughs and capitalise on the trend towards sustainability and environmental responsibility. The company has pioneered the creation of 'vegan leather' from leftover persimmons, providing an eco-friendly alternative to traditional leather and reducing food waste. Through collaboration with the fruit and textile industries in the Alginet area, PersiSkin has been able to create a more sustainable and efficient supply chain while offering a unique product that appeals to eco-conscious consumers.
Spain has a growing ageing population, and there is a growing demand for senior care services, needing a wide offering of services that cater to the needs of senior citizens. For example, businesses can offer home care services, such as meal preparation, housekeeping, and transportation. Companies can also offer specialised services, such as physical therapy or memory care, as well as a wide range of online or over the phone support.
On this note, the ageing population, along with technological advancements and climate change, will redefine societies and economies in the coming decades. Spanish and Portuguese societies are ageing quickly due to reduced birth rates and increased life expectancy, leading to a declining working-age population and rising dependency rate.
The senior care industry in Spain and Portugal is home to a number of renowned brands, including DomusVi, Vitalis, Korian, Residências Montepio, and Lysmon. These companies offer a range of high-quality and personalised care services, including assisted living, nursing care, rehabilitation, and home care services. They are all known for their innovative and person-centred approach to care, and are focused on meeting the unique needs and preferences of seniors to improve their quality of life.
Veganism is also a growing trend globally, and Spain is not different, but there is a gap in the market for vegan food products, creating an existent need for delicious and affordable choices. For example, a company can offer a range of vegan cheeses, meat substitutes, and plant-based snacks. The company can also offer vegan catering services for events and parties.
Heura and Granovita are two vegan brands making an impact in the Spanish market. Heura is known for its realistic meat-like texture and taste, offering vegan chicken, beef, and sausage alternatives as a healthier and more sustainable alternative to traditional meat. Meanwhile, Granovita is a Spanish brand that offers a range of vegan and organic products, including plant-based meat alternatives, spreads, and snacks that are marketed as a healthier and more environmentally friendly alternative to conventional products.
Strategies tapping into potential niches
Once a business has identified an untapped or underserved niche, it needs to develop an informed strategy because it is not enough to simply identify a gap in the market. This involves carefully researching and understanding the target audience, as well as the competition, and the wider market context of course.
This information can inform a unique value proposition that resonates with the target audience, and sets the business apart from the competition. Additionally, a well-informed strategy will help the business to identify potential challenges and obstacles, and develop effective solutions to address them.
Obsess over differentiation
Businesses need to differentiate themselves from their competitors by offering unique products or services. They can do this by offering a superior product or service, providing exceptional customer service, or using innovative marketing techniques.
For example, a business that offers organic skincare products can differentiate itself from its competitors by using unique ingredients, such as rare botanical extracts. The company can also offer exceptional customer service by providing personalised skincare advice and consultations.
Build strategic partnership
Businesses might choose to partner with other companies to expand their reach and offer a wider range of products or services, or to reach a wider range of buyers, or a specific hard-to-serve segment of the population.
For example, a business that offers sustainable fashion products can partner with other eco-friendly businesses to create a network of sustainable brands. The company can also collaborate with influencers or celebrities to promote its brand and reach a wider audience.
Businesses need to adapt their products and services to meet the specific needs and preferences of the local communities. They can do this by customising their products or services to suit the local culture and tastes.
For example, a business that offers vegan food products can tailor its offerings to include traditional Spanish dishes that are vegan-friendly. The company can also source its ingredients from local suppliers to promote local agriculture and support the community, impacting the lives of local producers.
Innovation and creativity as a trademark
Businesses need to continuously innovate and improve their products or services to stay ahead of the competition. They can do this by investing in research and development, adopting new technologies, or creating new business models.
For example, a business that offers senior care services can adopt new technologies, such as remote monitoring or telemedicine, to improve the quality of its services. The company can also create a new business model that combines home care services with assisted living facilities to provide a more comprehensive solution for seniors.
Identifying and capitalising on untapped or underserved niches in the Spanish market requires extensive research, creativity, and innovation. Businesses need to identify the gaps in the market and develop a strategy to differentiate themselves from their competitors.
They also need to adapt their products or services to meet the specific needs and preferences of Spanish consumers. By using a combination of these strategies, businesses can successfully enter the Spanish market and tap into the growing opportunities in various industries and trending sectors.