E-commerce businesses have a low overhead. This allows them to cater to niche markets. They can focus on vertical markets because the internet allows them to sell their products around the world. While their customer base may be small, their reach is wide enough and their overhead is low enough to make focusing on a niche market profitable.
If you are still wondering what are verticals in business, consider the example of an online store. An online store that sells sporting goods of all kinds represents a horizontal market. Their focus is wide, looking to attract people from all walks of life who have any interest in anything sports-related.
Conversely, a sporting store that only sells racquetballs, racquetball racquets, and racquetball equipment represents a business that focuses on a vertical market. Going back to the example of the online store that sells sporting goods of all kinds, if within their organization there are separate departments focused on separate sports or separate types of sporting attire, they represent a narrower vertical market.