Is It Worth Starting A Business In A Crowded Market?

In business, the term “crowded market” is often used pejoratively, and there is always the underlying suggestion that any prospective entrepreneur who starts a company in such a market may be doomed to failure. There’s undeniably some truth to this statement, too; if an entrepreneur starts a business that is essentially a replica of an existing company (or worse yet, multiple companies) and offers nothing new to customers, then a market crowded with better-established competition is unlikely to be welcoming.



The simple truth is that, realistically, most markets are crowded. We live in an entrepreneurial age, but there’s only so many great, unique ideas to go around, so you’ll see the same core business concepts repeated time and again. As a result, the vast majority of new businesses will be offering the same products and services as companies that are already in existence.

Is this really such a problem?

It depends on your perspective. For consumers, a crowded market is actually welcomed. No one wants to live in a world without choice, so being able to choose to buy from one of 200 different ecommerce stores or buy one of 100 brands of toothpaste is actually a good thing from the customer perspective.

However, for business owners, a crowded market is more difficult. Choice – which so benefits consumers – becomes a problem; companies are constantly competing with and trying to outdo one another, and continued success can thus never be assured.

How can businesses thrive in a crowded market?

Firstly – and as we touched on above – operating in a crowded market means that there needs to be a special focus on ensuring the business can stand out. Marketing and promotional activities are important in this regard, and working with companies such as an SEO agency to help improve Google ranking performance – especially when compared to the performance of competitors – will always be beneficial. Word-of-mouth simply isn’t sufficient to allow a business to thrive in a highly competitive environment.

Secondly – and this is a factor that is often overlooked – businesses that are opening in a competitive market have to really focus on customer retention. It’s easier to lose customers in a crowded market; customers have plenty of other businesses they can patronize, so if they’re dissatisfied, they will simply go elsewhere. As a result, a focus on customer satisfaction and improving the customer experience will always be critical to succeeding in a crowded market.

Finally, it must be noted that branding has an important role to play in a crowded market. Many companies offer much the same service or product as those that are already widely-available, but through branding themselves to appeal directly to a specific section of consumers, they can find their own place in the market.

In conclusion

To answer the titular question: yes, it is undeniably worth starting a business in a crowded marketplace. There will always be an appetite for greater choice among consumers, and with the right marketing, SEO, and customer retention focus, even a new business can find its place and enjoy great success despite a high volume of competition.

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