noun
chancy trade; business with uncertain profitability
Refers to businesses where income is unstable and depends on popularity, trends, or luck. Often used for entertainment or service industries with high variability.
飲食店は水商売だから、景気に左右されやすい。
Restaurants are a chancy business, so they are easily affected by the economy.
noun
Specifically refers to bars, hostess clubs, cabarets, and similar nightlife establishments. This is the most common modern usage.
彼女は水商売で働いている。
She works in the night entertainment business.
水商売は華やかに見えるが、大変な仕事だ。
The nightlife business looks glamorous, but it's tough work.