"What is the most profitable business in the era of deflation?"

After Japan's bubble burst in 1990 (the lost three decades), there was no absolute single "most profitable" industry, but relatively prominent sectors included essential consumption, mental entertainment, cultural exports, and some technology and healthcare sectors.
The overall economy was sluggish (GDP growth slowed, deflation, asset price crashes), traditional cyclical industries (such as real estate, finance, steel) were heavily impacted, while fields adapting to a low-desire society, aging population, and consumption downgrade experienced countercyclical growth.
1. Second-hand luxury goods / used stores
After the bubble burst, people's incomes declined, debts soared, and many sold off luxury items purchased in the 1980s (bags, watches, clothing) to make ends meet.
The second-hand luxury market rapidly emerged, with stores adopting a buyout + refurbishment + resale model to earn the price difference. It became one of the earliest "golden tracks" during economic downturns.
Represented domestically by Xianyu, which Sun Ge says is the coolest app, with explosive traffic, potentially becoming a very promising future development platform for second-hand trading, and a top second-hand app domestically, also a platform where ordinary people can earn excess profits during deflation.
2. Entertainment / cultural industries (anime, games, music, movies) — essential mental consumption
When material consumption is sluggish, people turn to inexpensive spiritual comfort. In the 1990s, Japanese anime (such as "One Piece" and "Slam Dunk") became globally popular, boosting related, film, and export income.
The gaming industry: Sony PlayStation (1994) and others rose, becoming Sony's most profitable sector. Nintendo, Sony, and others achieved high growth through content output during periods of low growth.
These "soft power" industries expand countercyclically during economic stagnation, making them typical winners in a "low-desire society."
3. Drugstore / discount retail + essential consumption (medicines, food, daily necessities)
Matsumoto Kiyoshi, Tsuruha, and other drugstores expanded from selling medicines to cosmetics, daily necessities, and food, with high gross margins (medications subsidize others), affordable prices, and adapted to consumption downgrade.
Since the 2010s, their growth even surpassed convenience stores. Aging + economic downturns keep demand for essentials and "cheap good goods" stable.
4. Healthcare / pharmaceuticals + education and training + beauty (the beauty economy)
Stock market / industry data: since the 1990s, sectors like pharmaceuticals, services, and precision instruments have shown positive cumulative gains, with the healthcare sector outperforming long-term.
Aging drives the silver economy; under employment pressure, skills/language training grows; during economic depression, the "lipstick effect" (small pleasures like cosmetics) appears.
5. Single economy + pet economy
After Japan's bubble burst in 1990, the marriage rate gradually declined, birth rates fell, and the population entered negative growth. The single economy gradually emerged, with solo hotpot and solo dining becoming mainstream.
Alongside this, the pet economy rose; loneliness caused by being single led to more people raising cats and dogs, and pet-related businesses like veterinary clinics, pet toys, and pet food gradually became popular.
After the bubble, Japan entered an era of balance sheet repair, deflation, and low desire. During economic downturns and deflation, semiconductors, electronic components, healthcare, essential consumption, and precision instruments led, while finance, real estate, and heavy industry suffered heavily.