The Business Opportunities In A Recession

West Europe has long been a champion of green energy. In fact, they pride themselves on using a variety of clean energy in a polluted world. However, due to the Russian-Ukraine war and Germany’s political stand, Germany now has no choice but to reactivate their coal power plants in preparation for the winter. Because of their insistence in condemning Russia, they were unable to get the necessary oil and natural gas. Despite the coal option being a heavy pollutant, Germany on the moral high ground has no choice but to use it, slapping itself in the face in the area of clean energy.

Only when one is warm and well-fed, can an individual talk about higher-order matters such as morality and saving the world. When one is hungry, one will even murder for food.

The Signs Of Recession

The global economy is not doing well. China has such a high youth unemployment that it stopped reporting. Everywhere around the world, MNCs are retrenching thousands of staff. Companies are shutting down their businesses one by one. Inflation is at a very high level, further stabbing the middle class all the way to the unemployed right in their wounds. The retail stores inside the shopping malls and in the streets are empty of tenants. These are signs of an upcoming recession which I will not go too deep into, for we have sort of covered it in the past articles.

The US is simply prolonging the recession which should have exploded in 2018 and recovered by now. But not only did it artificially prolonged the recession, it printed out 75% of the current money supply in the Covid period. However the longer the delay, the bigger the pain when it finally explodes. What we sow yesterday, we will reap tomorrow.

When that happens, what can we do? I have wrote an article on preparing for a recession, and today we will talk about the business opportunities in a recession.

Cheap Luxury Goods

In my last article on consumerism, I shared that people love to buy branded and luxury items as it showcase their socio-economic status. That is all well and fine during good times. However when a recession hits and people do not have the money to do so, that desire is still there. The ladies may know that it is impractical to buy a $5000 Chanel bag now, but a $70 Dior lipstick is still certainly affordable and reasonable. It is a scale-down, but it is still a famous brand.

Luxury brands are still popular, but people simply scale down on the smaller purchases which their wallets are able to afford. Knowing this mentality, one will be able to capitalise on it. Do you have any network or resource which will be able to get you discounted small luxury items? For example, if you know somebody working in Sephora, you might be able to procure certain cosmetic or skincare items at a lower price for reselling.

Think about the smaller luxury goods which you may be able to get, and start building the network and business now. You may find yourself having an additional income while everyone else is suffering and at the same time still unable to let go of that desire to buy luxury goods.

Second-Hand Items

In Singapore, there is a second-hand clothing chain store called Refash, which has expanded quite well in the recent months. Few years back nobody like to wear second-hand clothing. In fact, I know some people who are even insistent on buying a brand new house when they got married, refusing to buy an existing one from the market because they do not want to stay in a second-hand house.

However, as the economy gets worse, such vain insistence is no longer sustainable. Simply because second-hand items are cheaper. Whether it is a PS5 game, clothing, phone, laptop, book or any other items, a second-hand item is generally cheaper than a brand new one. If you can get past the second-hand mentality, the quality and user-experience of the item may not be that much different afterall. When one is poor, all the past principles collapse like a house of cards, especially so if the principles does not concern the basic moral and survival needs.

Insistence on not using second-hand goods? Screw it.
Insistence on not eating cheap food? Screw it.
Insistence on not going to cheap holiday destinations? Screw it.
Insistence on a romantic and expensive celebration every anniversary, birthday and all the weird ‘significant days’? Screw it.

Just like how Germany screwed its reputation on clean energy in the face of survival.

When one is poor enough, one will automatically slap himself or herself in the face on the vain principle of not using second-hand items. Hence, the second-hand market is a potential big market which one can consider. Your business opportunity will be to look around you and see which of the second-hand items you are familiar with and able to do.

The Cheap Goods Market

When one is well-off, he will be picky in a lot of things. Perhaps he is unwilling to buy from the cheap goods market, for example the China Taobao (the Chinese e-commerce platform) marketplace. Afterall, their unwavering impression that China has only lousy goods (admittedly many China sellers are scammy once they know you are a foreigner) fuels their illogical drive to buy only from the supposedly trusted local or Western endorsed marketplaces, like Amazon.

There are also some I know who are willing to buy Chinese goods, but are generally unwilling to wait for the approximately 2 weeks delivery time, opting for the more expensive but faster physical retail store or local online marketplace options. But when one has no money, their time has also become cheap. People become more willing to wait for non-urgent goods if it saves them money.

Consider doing dropshipping from the Taobao market. Whether it is Taobao for retail consumers, or Alibaba for business volumes, the Chinese market indeed has many cheaper options. Naturally, one needs to know the Chinese language minimally on the basic level and knows how to navigate the swamp of the Chinese marketplace. During a recession, people’s insistence for speed or their baseless perception of low quality Chinese goods will crumble without mercy.

If you are able to capture this segment of the market, you will also find yourself having a decent business opportunity.

Conclusion

In Chinese, a crisis is written as 危機. The first word means danger, and the second word is opportunity. There are opportunities in danger, but you will need to know how to capture it properly. Start preparing early for the upcoming crisis, and you may find yourself not only being able to save up money, but also to expand your income source.