How to Do Market Research to Find the Right Niche?

Many of us aspire to create the next unicorn company. The real question is: how do we achieve this?

While we don't have a straightforward answer, we recommend starting from the basics by asking yourself, "How do I choose a niche?"

The insights we provide below will guide you in identifying trending niches, enhancing your product expertise, and spotting opportunities for future mobile products.

FoxData, a FREE App Data Analytics Tool,  supprt you analyze these four parameters and more!

By examining your competitors' download numbers and revenue, you can gauge market size, user interest, and their willingness to pay. It's beneficial to observe trends in this data over recent months.

If new competitors are emerging and these metrics are rising for all players in the niche, it's a sign that the niche is active and growing.

Conversely, if you notice several large competitors alongside many smaller ones, and their metrics are declining, it might indicate a waning trend and suggest that the niche was identified earlier. In this case, you may be late with your idea.

---

👏Expert Tips: You can directly use FoxData's Estimated Downloads/Revenue to study the data trends of your competitors. App Intelligence allows you to compare trends for up to 4 competitors at once.

---

The ideal scenario is when there is one major competitor that entered the market recently, along with several smaller ones, and all are experiencing growth in revenue and downloads.

This suggests a growing market. Note that your first competitor has partially validated your idea, providing valuable data from which you can learn.

By assessing the number of competitors and their release dates, you can determine how long they've been in the market and whether the trend is emerging or becoming outdated.

Additionally, by analyzing the top countries where your competitors operate, you can enter a different market or share the existing one with them.

---

👏Expert Tips: Market Segment-Country/Region supports you in more easily researching the primary user acquisition and revenue markets for the category you are interested in.


If you have specific competitor targets or wish to conduct more precise research, you can further explore the primary target markets of those competitors directly through App Intelligence-Global Downloads/Revenue.

---

Guide to Discover the Right Niche-Example

Step 1 - Identify the idea

Example: We have an idea for a mobile casual game app that included many mini games.

However, not everyone can successfully confirm their ideas in the first step.

What if we don't have any ideas in the first step?

In that case, our experts recommend starting with market analysis.

You can directly draw inspiration from FoxData-Market Segment-Category.

Not only can you visually see the top-ranked categories in terms of downloads and revenue, but you can also observe the growth in downloads and revenue compared to previous periods.

👏Expert Tips: In this step, you should not only refer to the Top Category but also check the table below to identify the fastest-growing categories. This will help you seize market opportunities more effectively.

In addition, if you switch to the "Trend" section, you can directly conduct a trend comparison analysis of several categories you are interested in, which will help you confirm your ideas more quickly.

👏Expert Tips: By comparing market trends across different categories, you can identify which categories are experiencing increasing or decreasing demand. This helps in determining which markets might have greater growth potential.

Step 2 - Find your competitors

To begin our analysis, it's essential to search for existing solutions in the market.

The presence of competitors indicates that there is a viable market. Rather than discarding your idea, use this opportunity to study their solutions and gain valuable insights.

After confirming the category market, you can go directly to FoxData-Market Segment-Top Apps to find the top apps in your category of interest.

This will allow you to quickly confirm your final ideas and identify competitors for research.

👏Expert Tips: We recommend that after selecting your target category, you sort the Estimated Downloads/Revenue YoY Growth column in descending order. Compared to the top applications in terms of downloads and revenue, the top applications in terms of growth rate can better help you find suitable niche markets and apps. This is because rapidly growing apps may represent opportunities that are not yet fully exploited or emerging user demands.

Afterward, you can track these top-growing applications as your competitors for further research.

Step 3-Analyse your competitors 

After tracking the top-growing applications, you can directly analyze competitors' performance and strategies using the FoxData-Competitor feature!

You can track multiple top-growing applications for a comprehensive competitor analysis, or you can directly select multiple recommended related competitor apps under the FoxData-Competitor feature.

👏 Expert Tips: Compared to studying a single competitor, we recommend conducting a comparative analysis of multiple competitors.

This approach provides a more comprehensive understanding of market trends, consumer preferences, and changes in demand.

Additionally, different competitors may adopt varied strategies and positioning. By comparing them, you can identify gaps in the market or unmet needs, thereby uncovering potential opportunities.

"Competitor"  feature is designed for competitive analysis, integrating features such as App Info, Estimated Downloads, Estimated Revenue, Ranking, Rating & Reviews, and Keywords—all the detailed functionalities you need.

You can refer to the following blog to conduct your subsequent competitor analysis. This will help your app better position itself and develop effective market strategies.

💡 Guide to the Competitor Analysis: A Comprehensive Guide to Mobile App Competitor Analysis in 2024

Step 4-Review the Finalized Niche Market You Identify

When conducting competitor research, you can begin to review whether the app market aligns with your expectations.

The specific review steps are related to what was mentioned earlier in "Key Parameters to Analyze."

When selecting competitors, it's best to include products from both strong publishers and lesser-known ones.

Afterward, use App Intelligence to observe the download and revenue trends of the direct competitor apps you have selected.

The ideal scenario is when one major competitor entered the market recently, along with several smaller ones, and all are experiencing growth in revenue and downloads.