Stock Trading and Other Things

What is a niche market and why is it important for small businesses?

Can you define in a simple way, what a niche market is and why it's important. I heard niche markets aren't much competitive, so thats a plus point. but still, can you guys please help me out here? :/
Best answer to be voted!

Thankyou :)

Public Comments

1. Speaking just from the online business point of view, a specialty niche is the only practical way for a small time operator to make a showing in the search results, one ideally would rank at the top of page 1 of Google searches for your product.service, free search engine traffic leaves more profit margins than using paid advertisements to bring in customers. Unfortunately the most profitable large market searches are highly competitive, with millions of sites coming up for a search for Jewelry. Sites at the top of the results for Jewelry spend a fortune in site development and search optimization to secure the spot. A business that caters to a smaller specialty niche, like Stainless Steel Jewelry will have 100 time less competition, making it possible to rank well for at least that one particular search.