Often now and then I get asked, “what do think are the top industries to invest and do business in right now?” and my answers are always the same, “you need to consider the industries with a good track record, ever increasing in demand year over year”.
I would love to dive into the list immediately but before the doing that I would like to enlighten us about what a business industry is so it isn’t mistaken for a “business idea or sector”.
An industry is a grouping of various businesses whom produce and sell similar products or services.
In this article, I’ll:
List and explain the industries
I’ll give examples of the big players
Lastly, I’ll give pro tips.
Without further ado, here are the top ten most lucrative industries to do business in 2020
10. Fashion industry
The fashion industry remains one of the largest industries world wide, being able to serve all demographics, the industry always has a constant flux of demand for their products and services.
The fashion industry combined with the retail industry has about 235 billionaires which is roughly 11% of the world’s billionaires.
The fashion industry consists of brands which provide luxury goods while others provide general necesities
LVMH, the french luxury giant is undoubtedly the biggest player in the fashion industry; they own brands such as Sephora, Fendi and Louis Vuitton.
Gucci, one of the biggest brands in fashion is worth over $4 billion
Before doing business in the fashion industry, it is imperative to determine what products or services you would be delivering(some businesses in the fashion industry are retailers, some are fashion designers etc, it is imperative to determine which you’re willing to branch into) and as well, determine your target demographic. For instance, you could niche down and target people of certain ages or cultures with your fashion brand.
9. Retail industry
The retail industry is undoubtedly the largest industry in the world and it serves all sectors and products.
As I said before, the retail industry combined with the fashion industry has about 235 billionaires which is roughly 11% of the world’s billionaires.
Retail involves buying products from manufacturers and wholesalers and then selling such products to end consumers.
Given the simplicity and straightfowardness of the model, businesses operating in this industry usually find success. However, fierce competition and over saturation over the years has made the industry harsh to new comers.
Retail can be done in the old-fashioned brick-and-mortar way or through the internet in what is called internet retailing or e-tailing.
Walmart is the world’s largest retailing company as well as the largest company in the world earning it it’s spot at the top of the Fortune 500 list. Walmart boasts an excess of $500 billion in annual revenue.
JD.com is China’s largest e-tailing company boasting an excess of $65 biilion in annual revenue
Amazon, the ecommerce giant is the world’s largest e-tailing company as well as the largest ecommerce comapany in the world in terms of annual revenue, with an excess of $179 billion per year.
If you wish to do business in the retail industry, you need to do add to rely heavily on the internet and social media platforms as e-tailing is what’s given most retailers an edge and good competitive advantage over the traditional brick-and-mortal retailers.
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8. Manufacturing industry
The manufacturing industry is obviously the most labour intensive and time consuming industry to do business in, not to mention how insanely expensive it is.
The manufacturing industry has many different sectors under it and these include; automobiles manufacturing, electronics manufacturing and a host of others.
The manufacuring has seen a huge growth due to a high increase in industrialization worldwide and also due to growing economies. Technological advancements and innovation has also led to the massive growth of this industry over the years.
The manufacturing sector accounts for 207 billionaires which is about 9% of the world’s billionaires.
The automobiles sector of the manufacturing industry boasts about $2.98 triliion in revenue, as of 2020.
Volkswagen is the largest automobile company in the world as well as the ninth largest company in the world in terms of annual revenue. It boasts an excess of $278 billion in revenue.
Toyota which is the tenth largest company in the world in terms of revenue is the second largest player in the manufacturing industry. It boasts an excess of $272 billion in revenue.
If you decide to do business in the manufacturing industry, it’s very advisable to consider automobiles because it is the fastest growing and most profitable sector of the manufacturing industry. When doing business in this industry, it is imperative you create unique products for different target audiences, for instance, Toyota markets and creates it’s cars for the middle class thus making their products highly affordable and this is one of the secrets behind their success. You don’t want to create a Lamborghini and market it to the middle class, lol. Hope you get my point.
7. Hosptality & Travel industries
Ever heard of Airbnb or Expedia?
Well, they’re amongst the few kings when it comes to the hospitality and travel sector
Innovations and technology has made this industry witness a massive growth over the years. Businesses at all levels have benefitted from this massive growth including hotels and hotel chains, vacation rentals etc.
But, the biggest gainers are the Online Travel Agencies(OTAs) which enables travellers to make use of their platforms to book and make reservations online for a variety of services including hotels, flights, cabs, restaurants etcetera.
This industry is the major pivot of the tourism industry which nets in $1.7 trillion, annually.
Currently, the Hospitality and Travel industry has suffered a huge hit and decline due to the 2020 COVID-19 pandemic, with stock prices of the major players hitting an all time low.
It is guaranteed that after the pandemic, this industry will once again start to flourish.
Booking Holdings is the largest Online Travel Agency in the world. They make money from Commissions and Advertisements. Their revenue for the fiscal year of 2019 is $15 billion.
Expedia makes 70% of it’s revenue from hotel reservations and holds a market share of 17% in the Online Travel Agencies in North America. Their 2018 fiscal year revenue is $11.2 billion
In this industry, especially if you want to run an OTA, you need to have a reliable Policies in place such as Cancelation and Refund policy which you should make your users aware of, as we all know people might get stuck and decide to cancel their orders. If they know they would get their money back upon cancelations, it would make them feel safe, hence, they wouldn’t have any objections patronizing you.
6. Real Estate
With the ever increasing population of the world, the real estate industry will continue to witness massive growth due to an increasing need for infrastructure, housing and the likes.
There is a total of 220 billionaires in the Real Estate industry, and this accounts for 10% percent of the world’s billionaires.
The US has projected the world’s population to reach 8 billion by 2025. While, the United Nations has projected the population of the world to reach 10 billion by 2050.
This goes to show that there’ll be an ever increasing demand for infrastructure & housing by the ever growing population of the world.
Thankfully, the Real Estate industry is responsible for meeting these demands.
In 2020, the Real Estate industry has netted in a whooping $3.96 trillion.
Before proceeding to invest in this industry, you would want to check out the Top 15 Countries You Should Invest In Real Estate .
With all these being said, you should consider giving the Real Estate industry a try.
Brookfield Asset Management is the world’s largest real estate company according to Forbes 2000. It has assets worth $256 billion with a revenue of $56.7 billion and a market cap valued at $46 billion
Before investing in the real estate industry, it is imperative you do the following:
You need to carry out market analysis
You need to study the government laws and polices
You need to understand the tax laws, returns and yields
You need extensive research and strategic planning
5. Transportation and Ride-hailing industries
These industries have undergone the most innovative transformations in the past decade, thanks to advances in disruptive technology.
With the ever growing population of the world, the demand for this industry is set to skyrocket accordingly.
This industry will keep rising steadily as more and more people need to move around locally.
Uber made a distinctive mark when they brought innovation to the transportation industry by allowing people book rides with their mobile phones.
Ride-hailing is currently the hottest and most disruptive sector of the transportation industry, thanks to technology and innovation.
Thanks to ride-hailing, consumers now find it more convenient & easy to move around without having to go through the hassle of finding a taxi or cab.
Uber, the pioneer of ride-hailing is currently the biggest ride-hailing company in the world. Uber boasts an excess of $15 billion in annual revenue, although, they have never made a profit.
The transportation & ride-hailing industry has been subject to heavy scrutiny from government regulations and laws on transportation. Hence, if you plan on doing business in this industry, it is imperative you thoroughly study the regulations that govern this industry in your country or state of choice. Furthermore, due to stiff competition, it is imperative you become creative and innovate, else you’ll be left behind. You must have a Unique Selling Proposition and a good Competitive advantage if you wish to stand out from the rest of the flock(I mean other businesses in this industry).
4. Health care
The health care industry is probably the most important on this list. It is pivotal to life on earth as it aims improve the quality of life and make humans healthy, thus prolonging the longetivity of life.
People constantly spend money to help maintain good health and keep fit.
Recent innovations in this industry has led to break through in Bio-technology, solutions to eliminating resistant pathogens, etcetera.
The global health industry has a market value of $11.9 trillion as of 2019.
CVS Health Corp boasts an annual revenue of $257.3 billion as of 2019, making it the largest health company in world . The company is valued at $69.2 billion
UnitedHealth Group Inc., is a provider of health care, health insurance other various health related services. The company makes an excess of $240.3 billion in revenue and is valued at $184.8 billion.
Producing groundbreaking solutions is the major key factor if you wish to do business in this industry. The most important factor however, is producing safe and effective solutions and also conforming to the standards, laws and regulations of the government and appropriate health authorities.
3. Oil & Gas
With Saudi Aramco being the most profitable company in the world with an annual net profit of over $110 billion, it’s no surprise that the Oil & Gas industry retains it’s spot on this list.
This industry consists of companies whom explore and extract oil and gas from oil & gas reserves at various parts of the world.
Over the years, the price of oil and gas has been subject to frequent fluctuations, in part due to certain economic triggers.
However, this industry has been witnessing a steady growth in production, year over year.
Over the years, the Oil & Gas industry has acted as a catalyst for the other industries.
There’s virtually no sector where Oil & Gas products aren’t needed.
The global Oil & Gas industry has made an excess of $3.33 trillion as of 2020
Sinopec is China’s largest Oil & Gas company with a revenue of $414 billion. It is also the largest Oil & Gas company in the world in terms of revenue. As well as the second largest company in the world, as of 2020.
Royal Dutch Shell is the third largest company in the world as well as the second largest Oil & Gas company in the world, boasting an excess of $396 billion in revenue.
Investing in this industry is capital intensive. As an entrepreneur, you should study the various areas of the industry and settle for the one which suits you best.
2. Finance & Investments
This industry is where the real money is.
With big names such as ICBC, JPMorgan Chase having assets worth over 4 & 2 trillion US dollars, respectively. It’s no surprise this industry retains it’s spot on this list…
In terms of assets, the world’s biggest companies are banks. Banks such as Wells Fargo, Bank Of America, Industrial and Commercial Bank of China, JPMorgan chase, Agricultural Bank of China, just to name a few are all worth trillions of dollars in assets.
Worldwide, 310 billionaires belong to this industry, accounting for 14% of the total billionaires in the world. This makes it the industry with the highest number of billionaires.
Although, major financial crashes such as the 2008’s have caused a few set backs to this industry, it is however expected to recover over the years as there has been a constant increase in commercial banking activity due to the ever growing economic performance of the world’s countries.
The performance of the industry is heavily influenced by that of the economy.
In China, ICBC is the largest financial institution, as well as the largest in the world in terms of assets. The company’s assets are worth over $4 trillion, figures for the revenue are just over $168 billion.
JPMorgan Chase is the largest bank in the US, it’s assets are worth over $2.6 trillion, while it’s revenue is $131 billion.
Before conducting business your country of choice, it is imperative you thoroughly study the performance of the economy and find ways to adapt, as the economy is strong factor in determining the performance of businesses in the industry.
The technology industry consists of companies which manufacture technological products or provide technology as a service.
This industry is largely driven by innovation. And companies from this industry spend heavily on research and development.
Internet, Artificial intelligence, eCommerce and Software are currently the hottest areas in this industry.
Online shopping, social media, search engines etcetera are all products of the tech industry.
Amazon, Facebook, Alphabet Inc., Microsoft and Apple Inc., are referred to as the Big Five tech companies in the US. These companies dominate the ecommerce sector, social media and the internet at large… The combined valuation of these companies is $3.3 trillion.
9% of the world’s billionaires are from the tech industry, this brings the total number of billionaires in this industry to 205.
As of the time of writing, Microsoft is the most valuable company in the world, it’s market cap is $1.4 trillion. It is also one of the most profitable companies in the world, it’s net income is $39.2 billion.
Apple is currently the second most valuable company in the world with a market cap of $1.3 trillion… it is noteworthy to know it is also the second most profitable company in the world, it’s net income is $59 billion
Doing business in this industry is based on innovation… and you have to decide what you’ll be delivering, either a product or service. Whatever you choose to produce must be unique, as this will help you gain market share during your initial startup stage.
PS: All figures & stats in this article are the official data as of May, 2020.
The industries mentioned in this article have been among the fastest growing industries in the world.
If you’re pondering on what industry to invest in, you should consider any of the industry reviewed in this article
Before doing business in any of the industries, you must carry out your thorough research and you must know what busines model is applicable to such industry.
Question: Of all the industries mentioned, which is your favorite? Which of these industries does your current business belong to?
Thanks for reading at WealthOnPoint.
I’m the cofounder of WealthOnPoint, and business is akin to me just as blood is to humans. Being an advocate of business literacy, I’m the go-to guy for matters concerning business, marketing & investments. My mission: I wanna take your business to higher heights, the question is; are you willing to let me?