Promising Businesses amidst Economic Downturn (I)

1. Movie Industry

Each economic depression has provided increased opportunities for the entertainment business, especially the movie industry. Historically, in hard times, people tend to seek more entertainment to release their negative stress.

It comes as no surprise that box office revenue in China for 2008 recorded a rise of more than 26% for the second straight year, better than any other sector in the country.

Customers in a cinema in Guangzhou.

2. Online Computer Games

The online gaming industry saw a steady increase in 2008, and has been maintaining an upward year-on-year momentum of at least 50% since 2000. Its revenue totaled 18.38 billion Yuan last year, even when there were few big productions and no new listed companies.

This success is due mainly to the large demographic presence of online gaming enthusiasts between the ages of 18-35 in China, a country with a population of over 1.3 billion.

3. Psychological Consultancy

Almost 30% more people seek professional psychological therapy during economic slumps. Consequently, the Guangzhou Psychology Service Hotline has received more than 8,500 cases within the last year.

A psychologist introduces psychological solutions to some managers of factories  at a class in Panyu, Guangzhou. (nddaily.com)

4. Education and Training

More people are applying for further education and training to improve their career competitiveness in today's harsh job market.

The education market in China is expected to reach 300 billion Yuan, with the number of providers possibly increasing by over 25% in the next 10 years.

5. Management Software Development

It has been theorized that the present downturn might help the management software business as the global financial crisis helped SAP flourish three decades ago. Also, the huge domestic market is expected to push China's software industry forward this year.

The Beijing administration has vowed to boost upgrading of conventional industries as well as integrate IT and industrialization in 2009.

One securities operator predicted that Chinese companies would pay a total of 1,394.9 billion Yuan for business software and services in 2012.

6. Pharmaceuticals

Drugs are a basic necessity for living and people have an absolute, non-elastic demand for them. This creates a stable and profitable industry.

Many Chinese pharmaceutical companies have been enjoying a business boom recently, with nearly all of the fresh graduates in medicine managing to find jobs.

Furthermore, the Chinese government's upcoming campaign of 'Medical Insurance for All Citizens' will double the insured population, creating a soaring demand for medicine and medical services.

7. B2C (Business to Consumer) E-commerce

The cost-effective practicality of this business has major appeal for end users (online shoppers). Online dealers have more support from vendors in China, with more merchandise available at more preferential prices. The speed of logistics operation is another key to success – The faster a dealer can deliver the ordered goods to its customer, the more competitive advantages it will have in the market.

The domestic market size of B2C skyrocketed from 4.6 billion Yuan in 2007 to 8.7 billion Yuan in 2008, and might further increase to 11.8 billion Yuan in 2009, according to statistics from Analysys, a company based in China.

(To be continued)

(By Ronald Li and Stephen Roach)

Source: Lifeofguangzhou.com

Editor: Ronald Li