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Anoli Mehta is the founder and CEO of Circular Threads, a London-based marketplace for preloved South Asian fashion. “It’s very easy to argue that eBay or Vinted could create a niche segment but without a dedicated community, sellers are forced to severely devalue their product and buyers struggle to find what they are looking for,” she says on why there’s a need for specialised businesses.
Here she shares her top tips for building a platform for a niche audience.
Run the numbers
Use data to evaluate your market size, such as census data and cultural demographic reports or get the support of ChatGPT (just make sure to fact-check). Look beyond population numbers too and consider things like spending patterns and community growth rates.
People often assume that niche automatically translates to a small market. This can be true and, in that case, you need to decide whether it’s worth pursuing or if you need to pivot. For us, it made sense to serve the South Asian diaspora. The Indian diaspora is the fastest-growing global diaspora surpassing China. We have a national population of over 1bn and the total addressable market (TAM) is larger than most other sectors.
Understand your audience
Understanding who your customers are should be at the forefront of building a business. For a niche audience, you need to ensure you know them better than any competitor:
- Where do they hang out? Identify online and offline spaces.
- What groups are they in? Social media, religious, cultural.
- What interests, needs and behaviours do they have?
- What problems are they facing?
- Where are they getting their information? What are they reading?
- How does culture impact their day to day?
For South Asian communities, cultural touchpoints shape everything from spending to lifestyle choices.
Check whether people want what you’re selling
Do market research and speak to people — you want to understand what they need and not rely on stereotypes to inform what you’re going to build. You could even start a waitlist to see if people will pay for what you’re selling. At launch, we already had a waitlist of over 1,000 people desperate to clear their wardrobes. This proved to us we were building something people wanted.
This isn’t a one-time chat with your audience. To check in regularly, you need to establish ongoing communication channels and consistent touchpoints for feedback like:
- Quarterly surveys or feedback loops;
- Focus groups or community events;
- Social media.
Culture isn’t just a product feature
Being culturally relevant to a niche audience needs to be built into every touchpoint of the business from ideation and product to messaging, customer service and community events. This is what builds in defensibility because you’re not just a feature that a big brand could add as a category tomorrow.
When talking to a cultural niche you’re trying to integrate into their identity — you want your brand to be synonymous with that niche by being additive to that community’s lifestyle. That’s what supercharges your business. A good example of this is cosmetics brand Fenty. Despite the makeup market being saturated, it showed up to serve people of colour and speak their language across the company’s every touchpoint. When you think of foundations for people of colour, you think Fenty.
Education is key
Although you need to check what your future customers want, sometimes customers might not be immediately aware of why they might need your product. For example, buying second-hand South Asian clothing is a newer concept for our community, though sustainability has cultural relevance. Our role is to help connect the dots. You need to build trust before you can educate. It helps if you’ve had a big name vouch for you, you’ve run events in the community, have partnered with trustworthy partners or have great testimonials from early adopters.
Speak to your audience, not everyone
Avoid the temptation to generalise your messaging. While it’s useful for the general population to understand your brand, your main priority should be directly addressing those who will become paying customers.
Don’t destroy your reputation
Word of mouth can be a powerful asset in close-knit communities like the South Asian diaspora. But this cuts both ways: a poor customer experience can quickly spread and damage your brand. Prioritise quality control and customer support to maintain a strong, positive reputation.
Go after VC money
Your job is to show why what you do is a viable business on track to become a unicorn or whatever else your goal may be. The way to do this is data:
- Articulate the size of the market. I always do this at the top of every pitch.
- Show what already exists in the space and any success stories.
- Demonstrate your traction to date — sales, engagement or any other numbers. Monthly recurring revenue (MRR) and customer acquisition cost (CAC) are always great data points — if you have them — but they can be hard to calculate on very small budgets. We’ve found showing repeat customer data has worked well in our favour. Sometimes, investors may think you only exist for one reason — in our case, we are often pigeonholed as the place people come to for their wedding day — but repeat customer data shows this isn’t the case. Unless people are getting divorced and remarried at alarming rates!
- Show what you have been able to do as a team without funding or without a team.
On the subject of… niche companies
1. How to build a hyper-targeted marketing campaign for a niche audience.
2. How can brands build relationships with niche audiences?
This article first appeared in Sifted’s Startup Life newsletter. Want more stories like this? Sign up here.
