The common challenges associated with focusing on a niche are as follows:
The limited size of niche markets translates to a limited customer base, which can restrict the growth potential of a business.
Businesses may be more susceptible to economic downturns, market shifts, or changes in consumer preferences.
Dependency on a specific segment can hinder growth if that market’s needs and preferences change or if the market becomes saturated.
Intense competition will require brands to differentiate themselves and continually innovate to stay ahead.