Get Rich Quick: Six Lucrative Industries On the Rise in China

Get Rich Quick: Six Lucrative Industries On the Rise in China
Apr 21, 2015 By eChinacities.com

Looking to go into business in China? There are a number of very lucrative low-cost high profit industries currently on the rise. Tons of glasses-wearing Chinese citizens coupled with cheap construction costs makes the glasses industry a lucrative one. An aging and weight-gaining population is good news for the health care industry. Cheap production costs make the beauty industry one to watch as well. Here are six industries on the rise in China with very high profit margins.

1) Wedding Photography

Wedding photography began to appear in China in 1992, and by 1994 there were a number of wedding photography shops. In 20 years time, it has been a luxury staple for weddings in China. Wedding photo shoots have become a “once in a lifetime,” expense for engaged couples, and the industry has flourished.

There are about 450,000 wedding photography companies in China. Combined with the number of photo studios and agencies, there are about 5 million companies in the industry in China. Wedding photography has become one of the most promising industries in China and the profit margins are much higher than in other wedding related fields. The profit margins for wedding photography are about 30 to 40%.

Nowadays, large wedding photography businesses make 20 million Yuan or more per year. Medium sized companies make 800,000 to 20 million Yuan. A few of the largest companies make more than 50 million Yuan annually. There are more than 6 million people working in the wedding photography industry. The industry records total annual profits of more than 9 billion Yuan.

Let's see how the wedding industry makes its high profits. One wedding photography studio gave these numbers as an example. Labor for a photo shoot costs 567 Yuan, clothing costs 200 Yuan to be fitted and cleaned, renting a venue costs 750 Yuan and production costs 331 Yuan. The total cost for the production studio in this case would be 1848 Yuan. The studio charges about 10,000 Yuan for a photo session. Actual costs are often lower than this: some studios only spend 1000 Yuan to for their 10,000 Yuan wedding photo shoots.

2) Glasses

Those in the glasses industry in China make high profits from low cost materials. There is a popular saying in the Chinese optical industry, “When selling 20 Yuan glasses, a 200 Yuan price is about compassion, a 300 Yuan price is about friendship and a 400 Yuan price is about the market.”

In 2012, the Chinese optical industry reported profits of more than 16 billion Yuan in 2012. In 2011, there were about 300 million people in China who purchased glasses. Retail sales of glasses that year reached 23 billion Yuan.

The cost of producing glasses is actually extremely low. In Danyang, a city in Jiangsu known for its production of glasses and sunglasses, it costs companies 11 Yuan for a regular alloy glasses frame, and 16 Yuan for a “fashion,” alloy frame. The most expensive frames, made from pure titanium, cost 60 Yuan. When the glasses go on sale, they are priced 10 times higher than it cost to make them, sometimes even 50 times.

But aren't glasses difficult to produce? Actually, not really. The technical threshold to produce glasses is not very high, and it only takes about ten minutes to put in the correct lenses for a customer.

In Beijing, a pair of 1.56 index lenses cost 300 Yuan, 1.61 index lenses cost 600 Yuan and 1.67 index lenses cost about 800 Yuan. In Danyang at a wholesale market, the same lenses cost 8 Yuan, 19 Yuan, and 21 Yuan respectively.

3) Health

Chinese people are spending more than ever on health care. The health care product market does especially well during the holidays. The booming health care market in China has a number of lucrative business opportunities.

Despite the global economic recession, health care and health services are on the rise. The industry is worth about 300 billion Yuan, the largest after the United States. In 2015, China's health care industry is expected to surpass that of the United States and by 2020 the industry will be worth more than 450 billion Yuan.

There are a number of factors that affect the profitably of the health care industry. First of all, the world has an aging population. 13% of Chinese people are over the age of 60. That is 170 million elderly people looking to spend money on vitamins, pain relievers, and supplements. Second, there are about 20 million people in China categorized as overweight and obese who spend more money on health care than the average citizen. Lastly, higher living standards have led to an increased demand for health care products. Those with more disposable income will spend more on health care products.

4) Online Gaming

Last year, China's online gaming industry reported sales revenue of 18.38 billion Yuan. The industry is worth 47.84 billion Yuan including IT and telecommunications. The online gaming industry is worth more than any of the traditional three entertainment industries: the movie industry, the television industry, and the music industry.

Gross margins for companies in the online gaming industry are more than 50%, sometimes even 75%, and net profits are between 25% and 50%. Online gaming companies save money because they do not have storage, transportation, and manufacturing costs. On the other hand, gaming companies store their games on high security severs to reduce the possibility of piracy, which adds to production costs.

5)  Beauty

The beauty industry in China records profits annual of about 300 billion Yuan. The demand for beauty products is on the rise, and the industry grows about 15% every year. There are a huge number of new beauty products put out every year, along with high-tech care equipment and slimming devices.

“China's Annual Beauty Economic Report,” reported that China's beauty product economy is fast becoming one of the largest industries in the countries. The beauty industry is the fifth largest consumer industry in China after real estate, automotive, telecommunications, tourism.

11.2 million Chinese work in the beauty industry and there are 1.542 million urban beauty institutions that make a total of 168 billion Yuan per year. These beauty institutions make of 1.8% of the country's total GDP.

Beauty products are marked up around 90% from their prices at wholesale or production. Beauty products are produced at very little cost and the sales volume for the products is extremely high.

6) Baby Products

China is one of the world's largest markets for baby products. There are now 108 million babies in China aged 0-6 years old. In the future, the baby product market in China could grow to reach 500 billion Yuan. There is high demand in China for baby products: a baby less than a year old uses an average of five diapers a day. If the diaper costs 2-5 Yuan, parents spend 300-600 Yuan a month on diapers.

Newborn babies cost parents more than 2000 Yuan a month in baby products. This includes necessities, medical costs, photography and other care costs.

The baby products industry is divided in two sections: popular products (diapers, wipes, food) and high profit products (toys, safety products, daily household items, toiletries). The profit margin for baby food is only about 5%, but the margin for a high profit item, like toys are much higher, around 60%.

 

Source: QQ News

Warning:The use of any news and articles published on eChinacities.com without written permission from eChinacities.com constitutes copyright infringement, and legal action can be taken.

Keywords: China lucrative industries China high profit industries

4 Comments

All comments are subject to moderation by eChinacities.com staff. Because we wish to encourage healthy and productive dialogue we ask that all comments remain polite, free of profanity or name calling, and relevant to the original post and subsequent discussion. Comments will not be deleted because of the viewpoints they express, only if the mode of expression itself is inappropriate.

Guest2301262

'...lucrative low-cost high profit industries currently on the rise.' Nice sounding description for rip-off. Guess how much that plastic frame of your eye-glasses costs? Answer: most are around USD 1.5 per piece. I know because I attend their trade fairs. Sun-glasses, ski goggles,....same thing. Anything more is 'value building' sales/marketing BS. Exactly the same case with watches too, USD 1.2 per piece, those digital sport watches with timer, alarm, ...etc. Exploiting the weakness of the pathetic little ego (face thing) is probably THE best kept secret in the cannabalistic business world. Napoleon got it right, you are your worst enemy, moron. LOL

Apr 21, 2015 11:56 Report Abuse

royceH

I went to three weddings last year and they all paid Y10,000 for photos. I thought most of the displayed photos were gay and embarrassing. When we got married we had the girl standing in front of the Mao is Great sign snap away for 30 seconds and what we finished up with is really good. Cost nothing and it was a funny, special moment.

Apr 21, 2015 18:41 Report Abuse

coineineagh

none of these surprise me. you find a shop for each of those industries on every street in China, except glasses. it's part of modern Chinese culture to spend a lot on these products. Wedding photos are for the ubiquitous face and marriage reasons. Glasses are due to the myopia epidemic of schoolkids forced to stare nose-down into books all day. Health is because of the hospitals being ineffective and focused on profit. Online Gaming is a group activity, and as a fervent OFFline gamer, i see it as an entirely separate phenomenon with different motivation and reward. Beauty is important for women in any culture, but in the Mainland's superficial and intellectual void, this becomes a young woman's sole factor determining her value in society. Baby products are for spoiling your only child rotten, and it's typical that milk powder was not even mentioned - for most families it costs them way more than diapers. In conclusion, these 6 markets are great opportunities generated by artificial scarcity. It just goes to show that our current economic system is harmful, because it thrives on PROBLEMS and abhors efficiency. Those who are making money by servicing these problems will also work to prevent any solutions.

Apr 21, 2015 00:45 Report Abuse