African Entrepreneurship Records 2

Chapter 1515 Entering the Luxury Goods Industry

In another ten years, the Rhine royal family's population will at least double again, as Ernst's grandchildren will reach that age. In Ernst's view, the more uncertain the future, the more the Rhine royal family should encourage having more children. This would both prevent future monarchs from being unable to support the family alone and spread the family's risks.

After all, since the 19th century, countless royal families have vanished into thin air in the tides of history.

Returning to Alexei's family, even now that Alexei is the "Tsar," he still has to work hard to make a living for his family.

He said to his wife, "A while ago, due to the impact of the economic crisis, the stock market and the financial industry suffered a major blow, and other industries also had a hard time. Now that the economy is improving, do you think we should also invest in some new industries?"

When Alexei arrived in East Africa, he was not without savings. Nicholas II had made some preparations beforehand to send him to East Africa. For example, the properties invested by the Tsarist Russian royal family in East Africa were to be inherited by Alexei after he came of age.

This is not surprising, as other countries have been investing in this emerging East African nation since the end of the last century, following the South African war.

The Tsarist Russian royal family established many industries along the East African coast. As for the inland areas, East Africa was only opened to the world after 1910, which was not far from the outbreak of the World War. Therefore, the Tsarist Russian royal family's investment in East Africa was mainly concentrated in the coastal areas.

The main investment projects of the Tsarist Russian royal family in East Africa were real estate. Other investments were limited to some industrial and financial sectors. As for agriculture, East African agriculture was not open to foreign investment; otherwise, the Tsarist Russian royal family would have purchased a large number of farms in East Africa.

Therefore, Alexei still has a considerable fortune in East Africa. The only unfortunate thing is that East Africa's economic policies are not conducive to the development of the real estate economy.

Therefore, Alexei's wealth has not increased much over the years. For example, a few years ago, Dar es Salaam was the largest city in East Africa.

Dar es Salaam has held this position for almost sixty years since the last century.

Previously, investors from other countries believed that investing in East Africa's largest city was a sure way to ride the wave of success, as simply by acquiring property there could lead to continuous wealth appreciation, much like in New York, London, Berlin, and Paris.

Because, following the development path of the largest cities in other countries, their largest cities should be able to become the engine of the national economy.

However, in East Africa, things don't always go as planned. The strategy for developing industry and cities in East Africa has never been to concentrate all efforts on developing one or two key cities, but rather to develop in multiple directions.

Dar es Salaam, once the largest city in East Africa, has not benefited much from policy incentives and has recently even lost its title as the largest city to Mombasa.

Coupled with intervention in East African housing prices, this has ironically resulted in Dar es Salaam's real estate growth rate ranking relatively low among major international cities. However, overall, Dar es Salaam's housing prices have maintained steady growth.

Alexei's wife was still very interested in their investment. She told Alexei, "I have always advised you that the Soviet regime is stable and the restoration of the country is just a fantasy bubble. For us now, the most important thing is to live our own lives well."

"It's a pity that if we had understood this principle a few years ago, we wouldn't have wasted so much money on this bottomless pit of restoring our country."

"If that money had been invested in real industries in East Africa, it wouldn't have made a fortune, but it wouldn't have been a complete waste."

"Furthermore, we shouldn't have to pay for the restoration of our country in the first place. Compared to the Soviet Union, our wealth is nothing. Without the support of the East African government, it will have no effect at all."

Faced with his wife's domineering nature, Alexei could only nod in agreement, indicating that it was his responsibility. Indeed, in Alexei's family, his wife actually had more say. The reason was simple: Alexei's childhood experiences had made him a rather weak-willed person.

Fortunately, the Tsar's queen, Alexei's wife, was generally virtuous, so the two lived a relatively harmonious life together.

His wife continued, "It's not too late for us to realize this now. As long as we handle things properly, we can at least keep our current wealth, if not become extremely rich."

"Therefore, we should be cautious when it comes to investments. After all, neither you nor I come from business families, so we should be even more careful and avoid being overly ambitious."

Alexei wholeheartedly agreed with his wife's assessment, noting that he had indeed grown and matured over the years.

After all, the fact that he had persisted in the cause of restoring the country for nearly ten years but ultimately achieved no results was itself a valuable life experience for Alexei.

This life experience taught him that one should have self-awareness. If it were ten years ago, when Alexei was young and ambitious, he would still have some illusions about restoring Tsarist Russia.

By now, Alexei had come to the complete understanding that it was all just a dream, and that he had neither the strength nor the ability to restore his country and dynasty.

When it comes to doing business and investing, Alexei is even more aware of his level of experience and ability in these areas.

On the contrary, his wife, who had been managing the family business for many years, was more adept at this, so he was willing to listen to her advice.

His wife spoke eloquently: "Given the current economic situation, it's uncertain whether there's a risk of further deterioration in the future. However, the East African government's actions this time are quite significant. At least in the construction, steel, and cement sectors, there shouldn't be too many problems with investments in those areas in the short term."

"The news says that many large projects started during East Africa's Seventh Five-Year Plan period, so we should follow the steps of the East African government."

"Now we have two options: one is to take advantage of this large-scale infrastructure project in East Africa and get a share of the profits, and the other is to invest in some emerging industries that the East African government is interested in. However, I am more optimistic about the second option because too many people are eyeing the first one."

Alexei said with some concern, "Investing in emerging industries can indeed be more promising if you can bet on the right thing, but these companies are uncertain, and the risks are still very high."

Everyone knows that emerging industries will eventually grow stronger over time. However, as the saying goes, "one general's success is built on the bones of ten thousand soldiers." In this field, countless similar companies will fail and perish halfway. Some are even more unethical, simply using the name of emerging industries to defraud subsidies or inflate stock prices.

Alexei's wife disagreed with his concerns, saying, "Under normal circumstances, your worries are not unfounded."

"However, we do have a rare opportunity now, namely the outbreak of the economic crisis, which has eliminated a large number of charlatans."

"The companies that have survived so far have already gone through a round of screening and elimination. They either have real technology, or they have good management, or even the worst ones have connections." "In addition, the stock price is currently low, so this is actually a good opportunity to enter the market. By the time investors in other countries realize this, we will have missed this opportunity."

After listening to his wife's analysis, Alexei clapped his hands and said, "That's right. In that case, the economic crisis is indeed an opportunity for us."

His wife chuckled and said, "Not only that, the whole world is in the midst of an economic crisis. Against this backdrop, East Africa's previous losses were at most minor. Compared to other countries, except for the Soviet Union, it can be said to be an oasis in the midst of an economic crisis."

"However, the Soviet Union did not open its market to foreign countries and had no domestic investment channels. Therefore, in the coming period, international speculative capital will inevitably flow into East Africa in large quantities. Even if we do buy some bad stocks, the stock prices may rise instead of fall under this situation. This is almost a sure-fire way to make money."

In 1931, the country with the best economic development in the world was still the Soviet Union, because the Soviet Union's First Five-Year Plan had been implemented for more than half of its duration, a large number of enterprises and factories had been established, and the country had taken on a new look.

In East Africa, the start in 1931 was not bad, but the Seventh Five-Year Plan in East Africa had only just begun to be implemented, and its effects would certainly take one or two years longer than in the Soviet Union.

As for the period from 1931 to 1929, which coincided with the economic crisis, East Africa's economy, while better than other countries, still suffered significant losses.

Therefore, in 1930, the East African economy not only did not grow, but also declined to some extent. However, this process can also be seen as East Africa cutting away the rotten flesh of the market. It will be damaged in the short term, but it will be beneficial to the long-term health of the East African economy.

"Of course, I prefer some large enterprises and state-owned enterprises in East Africa. Although the profit margin of such enterprises is not high, they are stable."

"Having lived in East Africa for so many years, one thing is certain: companies with official backing actually have an advantage under East Africa's economic system."

"Moreover, compared to ordinary businessmen, we have a great advantage in terms of status and position."

Although Alexei was a Tsar in name only, his status was recognized by the East African government, allowing him to maintain official connections and network with many high-ranking officials and dignitaries. This was Alexei's greatest advantage, as many people didn't even have the opportunity to associate with the upper echelons of society.

Therefore, as long as he operates properly and maximizes his own advantages, Alexei can still do quite well. For example, in terms of corporate investment, his status as the "Tsar" can help him avoid many bureaucratic obstacles.

Alexei, who has lived in East Africa for a long time, understands this deeply, because East Africa is a country where "officialdom" is paramount, and power and status are even greater than capital.

His wife continued, "Of course, even if we determine the direction of the investment, we cannot ignore the details, such as which specific industries to invest in."

"I think the home appliance industry is a very good option. It is an industry that the East African government focuses on supporting, and its prospects are also very good."

"If the 19th century was the age of steam, and now is the age of the internal combustion engine, then the future will be the age of electrification."

"Although East Africa is currently among the world's leading countries in terms of electrification, I believe that its electrification potential is far from being fully realized."

"In addition, I believe we should increase our investment in the luxury goods industry. Compared to home appliances, luxury goods are our biggest advantage."

"This East African country has a short history and a shallow cultural heritage. Even the most illustrious Rhine royal family was nothing more than a minor noble family in Europe in the last century."

The Heisingen royal family, the predecessor of the Rhine royal family, was definitely not a minor noble family as she claimed. In terms of status, the Heisingen royal family was a branch of the most prominent Hohenzollern family in Europe, and a branch of the same lineage as Prussia.

Although the Kingdom of Heixingen is small in area, it is a real country, and the nobles who have fiefdoms have a higher status.

Furthermore, the Heisingen prince's status and position made it easy for him to become a high-ranking official in the German and Austrian imperial governments, which proves that the Heisingen royal family was by no means just a "minor noble family".

Of course, Alexei's wife wasn't without reason to say that. Leaving aside Alexei himself, even his wife, if it weren't for the fall of Tsarist Russia, could have become a prominent noble in the empire. Her father was a former duke of Tsarist Russia.

If we trace back through history, it is true that Alexei and his wife's family were more illustrious than the Heisingen royal family until the mid-19th century.

Before the mid-19th century, although the Hesingen royal family held a very high position and controlled a country, namely the Hesingen Principality, this did not change the fact that the Hesingen Principality was too small.

In the Far Eastern Empire, the so-called Black Xingen Principality was only the size of a town, and the Black Xingen Prince was equivalent to a town mayor. Although the two were completely incomparable, the Black Xingen Prince's position was hereditary, his social status was prestigious, and he could participate in the highest decision-making level of the Empire (Shinra). These were things that a small town mayor could not compare to.

This is similar to Nauru in my previous life, a tiny place with a population of only a little over 10,000, yet it was still a country. This meant that it could engage in diplomacy with major powers and participate in international affairs as a nation.

In short, Alexei's wife believed that their family's status and position in East Africa were only slightly inferior to that of the Rhine royal family. After all, now that Tsarist Russia had collapsed, no matter how famous the Romanov royal family was, they could only be subordinate to them.

But what she wanted to exploit was precisely the status and position of this fallen Romanov royal family.

"Many products gain brand recognition and increase their price and prestige simply by being labeled as royal goods, so we have a great advantage in investing in the luxury goods sector."

"For example, with perfumes, handicrafts, or even medicines, we can either invest in building our own factories or choose to cooperate with other companies to obtain a steady stream of income."

"Compared to investments in other sectors, luxury goods undoubtedly have lower costs, lower risks, and higher profits. And in East Africa, apart from the Rhine royal family and Archduke Franz Ferdinand's family, who can be more prominent in status and position than the last Tsar?"

"Our identity and status apply not only to East Africa, but also have a great influence in regions such as Europe and the Americas."

"Therefore, in my opinion, building a luxury goods giant with the Russian royal family as its brand is the best investment direction for us. Moreover, this kind of investment can be passed down stably. As long as there are no major mistakes, it can become the foundation for us and our descendants to make a living."

(End of this chapter)