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How To Succeed In A Saturated Industry


by Anand Srinivasan, founder of LeadJoint.com

Penetrating a crowded market may seem quite intimidating at first. How do you launch a new search engine when Google is omnipresent? Or, how do you succeed as an eCommerce store when customers are already happy with Amazon?

There are however a few advantages of entering a crowded market. For one, you already know where to find customers. Professors W. Chan Kim and Renée Mauborgne coined the term ‘red ocean’ (as opposed to ‘blue oceans’ that are markets that do not have competition) to refer to such markets. Succeeding in a ‘red ocean’ is hard, but not really impossible. In this article, let us take a look at a few strategies that successful businesses deployed to grow in a crowded market.

Improve User Experience.

One of the most effective ways to gain market share in a competitive landscape is to identify the bottlenecks in user experience and fixing them. It is not uncommon for legacy players who survive on reputation alone to slip up when it comes to user experience. A new entrant to the market may thus gain customers by providing them an experience that is vastly superior.

A good example of this strategy is the American legal services provider LegalZoom. The legal services industry is highly saturated with dozens of reputed firms operating in every city. The average customer however finds their first contact with law firms scary thanks to the jargon-filled ‘legalese’ that lawyers communicate with.

When LegalZoom launched in the early 2000s, the company focused on making it simple and easy for their clients to understand law. In addition to this, they also launched a self-service app that made it possible for customers to approach law much in the same way as they would buy flowers online. This brought about a dramatic shift in user experience that helped the company grow to what it is today.


Offering discounts is another popular way to penetrate a competitive landscape. This is especially true in the case of industries that are highly commoditized. For instance, there is little to no difference among the various competitors in an industry like sugar or salt. Attractive discounts help companies penetrate the market and such discounts are steadily lowered as their market share rises.

Discount marketing however comes with a number of risks. New players without a deep pocket risk being wiped out in the event of a price war. Also, price-conscious customers tend to be fickle. As a result, the market share gained due to discounts may get eroded when your company rises prices later. But most importantly, discount pricing could contribute to your brand being viewed as a ‘cheap’ product and this could prevent you from raising your prices.

But discount marketing is not always bad; especially if you can also tie this up with a low-cost strategy. Take Chinese smartphone manufacturer Xiaomi for example. The company’s brand of smartphones are extremely popular in emerging markets like China and India. These are also markets where legacy players like Samsung have enjoyed substantial market share for over two decades.

When Xiaomi launched, they cut down costs by focusing solely on online retail. This enabled the business to offer high-end phones for relatively modest prices. The result – the smartphone maker was able to sell as many as 40,000 phones in just 4.2 seconds. Xiaomi now enjoys a market share of over 30% in the highly competitive Indian market.

Carve a Niche. 

A saturated market tends to be a challenge only as long as customers see you as one of the many providers of the same product or service. Carving a little niche for yourself helps differentiate yourself from the rest and thus enables your business to penetrate the market.

There are many ways to do this. DuckDuckGo (or DDG as it is popularly known) is a search engine that launched in 2010 when Google was already synonymous with internet search. Yet, today, the website receives over 21 million queries each day. Although this is just a small fraction of what Google search receives (over 3.5 billion), it is still regarded a successful player catering to a niche audience.

So what did DDG do? They positioned themselves as the search engine that does not track you. This is in stark contrast to Google that has often been accused of snooping on user search behavior in order to show them ads. This positioning has helped DDG build a loyal customer base that is privacy-conscious and refuses to use Google for their internet searches.

Targeting a saturated market space is not always automatically a bad idea. On the contrary, such industries provide you with thousands of data points on what works and what doesn’t. This enables you to build a better launch strategy that can help you turn a profit sooner than you would in a ‘blue ocean’


Anand Srinivasan is the founder of LeadJoint.com, an online lead generation tool for digital marketing agencies. He is also a part-time marketing consultant and has previously worked with some of the most promising Indian startups.