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Last Saturday we had a party for some guests at our home. Our friend Ping brought all her cooking gears and prepared many dishes of delicious Chinese food. As soon as she finished one dish, she would bring it out to the dining table and urged us to eat right away. Then she went back to the kitchen to cook the next one. She did not join us until she finished all the cooking. So, when you go to a Chinese home party, just enjoy the food first and leave the conversation for a later time. Here's the post.

June 20, 2016 (Mon)

Warning and advice from a Chinese domain investor


Today I came across a long article written by a domain investor called Wei Tian LI (李伟天). While copies of this article can be found in some Chinese news and forums, I could not locate its source. However, because its content is very interesting, I decided to reorganize and summarize its main points here. This article was written after the author attended the Global Domain Industry Summit.


Warning:

(1) Bulk trading has no truth because of the burden of renewal, so the boom of 2015 will not come again.

(2) Weixin is eating websites (domain names). Weixin public accounts have quickly grown to 15 millions -- much more than the 4.2m Chinese websites developed since 1984. Companies are shifting to Weixin to reach their customers.

(3) While new gTLDS are here to stay, many (such as .ee and .gg) are highly risky as investment because of lack of test of time and wide recognition.

(4) Domain securitization does not work because Pinyin names are hard to appraise and short number/letter names are too small in quantity to support the market; lack of supervision and trust in the market are the other factors.

(5) Increasingly tight control of the Internet by the government makes it difficult to have boom in domain sales.

(6) It'll take longer to find the right buyer because huge supply of new extensions gives end users lots of choices.

(7) Domain names may be replaced by something new if the younger generation go for something else.


Advice:

(1) Shift thinking from "domain name" to "short domain names".

(2) Make sure your domain name can be used to develop into a website.

(3) Stick to meaningful .com names as their values will continue to rise. cn, net, and org are OK as they will survive. But, beware of other ccTLDs and new gTLDs as they can be manipulated by registries and big money funds.

(4) Avoid debt but keep cash. Watch more, buy less.

(5) Review domain names and drop the bad ones.

(6) Treat domain investment as secondary income source, not primary one.

(7) Do not expect mega return. 20% should be considered very good.


As I've said, I don't know the author so I can't tell his track record in domain investment. Therefore, make your own judgement when dealing with the Chinese domain market. A copy of the article in Chinese can be found at: http://www.22.cn/news/2016/0608/6380.html.