Coreile

Chinese Domain Market Newsletter

When you live in the sail city, the sky is a source of joy. After breakfast this morning, we walked up the hill. Looking up, we saw a clear blue sky. When we turned to the north, it's sunny and warm, and colorful beams came through clusters of leaves on mature trees. It was all beauty and peace. However, when we looked west, we saw nothing. Half of the city was covered by thick fog. What a wonderful world! Here's the post.

July 6, 2016 (Wed)

Advice from Chinese startup CEO: domain name first


Chinese is a compact language. This is seen in the few words Chang CHENG uses to describe their branding strategy: 先找域名,再定品牌 (Find the domain name first, then settle the brand.) Early last year, the Lenovo executive was tasked to create an innovative line of mobile phones. Naturally, he named the new company ShenQi (magical) and the new product brand Zuk.

First of all, what is the meaning of Zuk? Well, it's hard to tell because Zuk is not a dictionary word and Cheng has never explained it publicly. According to my search, Zuk is a Polish name meaning "beetle". Urban Dictionary probably gives us the best hint: zero. In explaining the Zuk culture, the company's website mentions Zuk as being the beginning of everything.

In creating the brand Zuk, Cheng (常程) applied their new branding strategy of domain name first. This is in sharp contrast with the traditional wisdom of working on the brand name itself first. What was the actual process in creating Zuk? Unfortunately, Cheng has not given away any details. However, I'll volunteer and try to reverse engineer the Zuk brand. Cheng's team probably started off with a set of criteria on domain names, as follows:

  • "beginning" or "new" message
  • global brand (Pinyin less likely)
  • .com, of course
  • one word (so no acronym or numeric)
  • up to 3 letters
  • $1m budget

They applied the criteria to narrow domain names available down to a short list of candidates. Then they studied each of the candidates and their branding possibility. Finally, they picked the best domain name + brand within the budget, and secured the domain ownership. The brand Zuk was born.

What is the implication to domain investors? Domain names are no longer just addresses in the digital world. They are taking center stage in any new business. A domain name has become part of a brand, and a brand cannot stand unless the matching domain name can be secured. The long-term outlook of domain names is very bright. Short, meaningful domain names on mainstream extensions (.com and .cn) will continue to increase in their values in China.

PS1: Zuk is becoming an umbrella brand. Recently Moto (remember Motorola?) was moved under Zuk.

PS2: Zuk.com was sold for $7k to an investor in China in 2011. In the following year, it was again sold to another Chinese investor for $54k (360k yuan). In 2015, the price was over $1m when Lenovo/ShenQi bought it. The rise is truly spectacular!