My wife pointed out this gap in the shoe market when looking for infant shoes (size 7 and under). We only found one company in Australia that sells good quality, waterproof infant sandals with light up souls. Unfortunately, this company had sold out and was not restocking.
We searched overseas company websites, but they did not ship to Australia and there were few styles to choose from. There was a greater choice in sizes above 7, but 7 and under for infants was hard to find. Closed in shoes were also more popular than sandals.
In my experience closed in shoes are good for special occasions and cooler weather, but sandals are best for active play. Toddlers love to splash in puddles and fill their shoes with sand and grass. If wet or full of sand shoes and socks need to be removed whereas sandals can stay on their feet. Sand and water simply run out the open sides. Waterproof sandals are also easier to clean and are perfect for the park, back yard and beach.
Waterproof infant sandals with light up souls could be the niche product you are looking for. Specialise in infant sandals or add to your existing shoe business.
Not being able to find desirable products on the market is one of the ways I find niche business and product ideas to add to my list. If you find something difficult to find, then it could be a profitable niche to start your own business. But do your own research, it could also mean the market is too small to be profitable.