Most new sellers searching for products to import from 1688 go straight to whatever is trending hardest on TikTok Shop or Shopee. The result is almost always the same: they enter a market that is already crowded, race on price against dozens of other shops, and watch their margin thin out until there is nothing left. A low-competition niche does not mean a niche with no buyers. It means demand is there but supply has not caught up. Finding that gap before others do is the entire advantage.
Why low-competition niches produce better margins
When too many shops sell the same item, competition collapses to one axis: price. Whoever prices lowest wins, and to win you keep cutting your margin. Carried long enough, the per-order margin across the whole market barely covers platform fees. This is not a theory. It is what happens to every product that travels from "trending" to "everyone sells it" on Shopee and TikTok Shop.
Low-competition niches run on the opposite logic. Fewer competing shops means you do not have to be the cheapest to make a sale. You sell because alternatives are scarce, buyers have less choice, and your selling price holds a real distance from landed cost. The margin is wider, you do not need to run aggressive ads just to move units, and once you have built solid reviews your ranking becomes self-sustaining.
This only holds if the niche has genuine demand. A niche with few sellers because nobody wants the product is just dead inventory waiting to happen.
Identifying niches with real demand but no saturation yet
The first task is learning to tell two kinds of thin-competition niches apart: niches that are empty because no one wants the goods, and niches that are empty because no one has spotted the opportunity yet. The second type is what you want.
Signs of real demand: A search term that pulls consistent results on Shopee or TikTok Shop, even if the shop count is low. On Shopee, search the keyword and look at the units sold for whatever shops are already there, however few. If one shop is moving a few dozen units a week without heavy promotion, that is organic demand. On TikTok Shop, search the term and sort by best-selling: if the top results show a handful of shops each selling steadily, demand is present.
Signs there is no saturation yet: Count how many shops are selling the same item. Under ten shops with sales spread reasonably across them is a healthy sign. If two or three shops hold almost all the volume, the niche is concentrated but not yet saturated. Look at the price band: if shops are pricing at noticeably different levels and none are near the floor of landed cost plus fees, nobody has started a price war.
Red flags to avoid: Shop count rising fast in recent weeks, prices dropping week by week, top shops running near-continuous promotions. Those are signs of incoming saturation, not an open niche.
The technique for going from broad category to tight niche
Most people find products by browsing the 1688 homepage or checking the top-selling lists on a marketplace. That route leads straight to whatever is already saturated. The opposite direction works better: start from a broad category, then drill down into progressively narrower sub-segments until you find a pocket with headroom.
A concrete example: instead of searching "kitchen goods" in general, go down to "food storage and meal prep", then narrower still to "compartment containers for prepped meals". That last group may have far fewer sellers but growing demand from health-conscious eating habits. Or from "phone accessories" down to "phone mounts for bicycles" instead of phone cases.
Practical steps:
- Pick a broad category you understand or can handle logistically.
- On TikTok Shop, search that category and scan the products that are selling, not just the "most popular" list.
- When you see a specific product with decent sales but few shops, note it and check further.
- Cross-check on Shopee with the same keyword: how many shops, what price range.
- If both platforms show demand with a thin shop count, move on to checking supply on 1688.
Checking 1688 supply to measure how easy entry really is
A niche with demand but very low barriers on the supply side will not stay empty for long. If hundreds of 1688 suppliers sell the exact same item at the same price with a low minimum order quantity, anyone who sees you selling well can import the same thing within weeks. A good niche has demand and at least some friction on supply.
The friction does not have to be large. A few realistic examples:
- Higher than average MOQ. If a supplier requires 200 to 500 units instead of 50, many small shops will not enter immediately.
- Small customizations. A specific color, size, or accessory bundle that only some suppliers can deliver. This does not necessarily cost more but takes time to source correctly, which is friction.
- Few suppliers with good quality records. If 1688 lists a product but only five to ten suppliers have strong review histories and consistent fulfillment, new entrants spend time vetting before they can order safely.
- Products tied to experience or content. Items buyers research before purchasing, or that benefit from tutorial-style content, create soft barriers. A shop that builds better content around the product has an edge that a competing shop cannot copy by just placing the same order.
When checking 1688, look at three things: how many suppliers list that product, what the typical minimum order is, and how wide the price spread is between the cheapest and the highest-quality supplier. A wide spread usually signals complexity, and complexity keeps casual competition out.
Reading timing signals to enter at the right point
The ideal low-competition niche is one that is beginning to grow, not one that has already peaked. Entering too early when demand has not developed means few buyers. Entering once the shop count has exploded means a price race. The window sits between those two points.
Signals that a niche is in the early growth phase:
- Sales at the top shops in the category are climbing week over week, but the total number of shops has not yet grown much.
- TikTok content about the related topic is gaining traction (not necessarily about the exact product) while the product listing count on both platforms is still low.
- The category is performing well in adjacent markets, which sometimes shows up in Google Trends by region, though caution is warranted since market conditions differ.
- 1688 suppliers have recently added new listings for the item, which often reflects their own observation of rising buyer demand.
On the other side, treat these as warnings: weekly sales at top shops declining despite a stable or growing shop count, prices hitting new lows regularly, and 1688 suppliers cutting prices to clear inventory.
Build the real margin before you commit
Finding a good niche but not verifying the actual margin is still a losing approach. Since low-competition niches typically allow higher selling prices, the margin calculation is especially important for confirming that the price advantage holds in practice.
Real landed cost per unit includes: the product price on 1688, domestic China shipping to the consolidation warehouse, freight to Vietnam (by actual weight or volumetric weight depending on the product, typically around 18 to 30 days by sea freight), customs and import handling, the order-agent fee if you use a service (often a few percent of the goods value), and an estimated shrinkage allowance. Convert everything to VND at the current rate, around VND 3,600 per yuan, but verify it when you calculate since rates move.
From the expected selling price, subtract real landed cost, the platform fee (which varies by platform, so check the current fee schedule for each one), and estimated ad spend per order. If the margin after all deductions lands at 20 percent or above of the selling price, the niche is worth serious consideration. Below 15 percent, revisit either the landed cost or the realistic selling price.
One distinction specific to low-competition niches: you can assume lower ad spend per unit than in a crowded market, but do not assume zero. Even a niche with few competing sellers needs some content and basic ads to reach buyers who have not yet heard of the product.
Bottom line
Finding a low-competition niche is not about finding strange goods that nobody buys. It is about finding the intersection of real demand, supply that has not filled in yet, and just enough friction to keep other shops from rushing in on the same week. When those three conditions line up, you have room to build a durable margin instead of racing to the bottom from day one. The remaining job is confirming it with real numbers before your money sits in a warehouse.