Coreile

Chinese Domain Market Newsletter

Recently I read the story of the twelve men in the book of Numbers. They were sent by Moses to check out the promised land. Ten of them saw giants and were scared to death; only two men saw opportunity. This story reminds me that in the investment world often the majority is wrong. Mark Twain said it beautifully, "Whenever you find yourself on the side of the majority, it is time to pause and reflect." Here's the post.

July 2, 2016 (Sat)

Potential of 4C .com in China


Domain investor Hao Nan CHEN (陈浩南) is doing it again. According to a June 29 news article by eName, Chen made a good profit out of his $1.5m (10m yuan) investment in 2C domain names last year, so he is putting the same amount of money back into investing -- this time in 3C domain names.

Last year, Chen acquired a large number of 2C .com domain names such as 1o.com, 7y.com, and 0c.com. So far this year, he has already purchased 55d.com, 75h.com, 77v.com, o86.com, and o92.com. How does he pick domain names? Quality is the key. Reading between the lines, I came up with the following criteria Chen uses in domain investment: .com, short name, has good meaning, can be used by end users, and finally good price.

For example, the domain name 27t.com he bought is not a random name but has great meaning. 27 rhymes with 爱去 (love to) and T means 淘 (treasure hunting) or 投 (put in). Together, the name 27t may mean 爱去淘 (love treasure hunting) or 爱去投 (can mean 'love to invest').

Having read this far, you must be asking this question: Will 4C .com be his next target? I don't know, but I do believe 4C .com has potential, and here are the reasons:

(1) 4C is still short at 4 characters, which can easily be remembered by consumers.

(2) Many 4Cs with good meanings have been developed into websites by end users. For example, BY56.com (百运物流) is an operating website where BY is the acronym for the company name Bai Yun and 56 rhymes with the word logistics which is what the company does.

(3) Prices of 4C .com domain names are still very cheap. You can even register 4C .com domain names after they are dropped from registration. No 2C and 3C can be registered this way; you must buy them from somebody else.

Underlying these factors are the growth in internet users and new startups in China. In a country of 1.4b population, there is still room to grow from the current 688m internet users. This is further supported by the "Mass Entrepreneurship And Innovation" and "Internet Plus" government policies to encourage more internet startups.

There is still tremendous demand for domain names. China has more than four times the population of the US but only 30 million domain names, a simple calculation suggests a potential of 500 million domain names in China (based on estimated 120 million domain names in the US as reported on Admin5.com on December 8, 2015).

This is why I like 4C .com. While I see opportunity in this niche, I'm not optimistic on random combinations of letter and number. There are too many 4C domain names (1.7 million) when compared with 3C (47k). In picking 4C .com domain names, research is key.