The other day we packed our lunch and drove to a park situated on a small hill overlooking the sea. We usually set up our table and chairs at a good vantage point to enjoy the blue sky and white clouds, with the harbor and the city center as the backdrop at a far distance. There is a sense of peace and freedom at such a quiet place. However, our peace was destroyed when we arrived to see the small park crowded with Chinese tourists frolicking and taking pictures of this beautiful setting. For a moment I felt like I was transported back to the dragon city. It's amazing to see how China has changed in such a short time, sending out large numbers of rich tourists overseas. Here's the post.
October 26, 2016 (Wed)
An interesting market report on short domain names
I often say that "short" is the key to Chinese domain investment. So, when I received the Liquid Domains Market Overview report published by Giuseppe Graziano of GGRG.com a few days ago, I was eager to find out how it relates to China.
The report used Estibot to estimate the total value (size) of .com domain names in each category, and gives us a breakdown by country. Because I'm particularly interested in the performance of these domain names in China, I rearranged the data into the following table.
|LL||$2.7b||USA (53%)||China (18%)|
|LLL||$2b||USA (54%)||China (16%)|
|LLLL||$2b||USA (42%)||China (20%)|
|LN or NL||$18m||USA (37%)||China(27%)|
|NN||$159m||China (53%)||USA (30%)|
|NNN||$429m||China (52%)||USA (41%)|
|NNNN||$378m||China (65%)||USA (25%)|
|NNNNN||$200m||China (56%)||USA (9%)|
Here are some of my observations.
While the US dominates the letter categories, China leads in all four numeric categories and I think language is the reason. Generally speaking, numbers are difficult to remember -- especially the longer ones. Unlike the English language, however, the Chinese language features rhyming which gives meaning to a number, turning numbers such as 520 (我愛你 = I love you) and 1688 (一路发发 = making a fortune all the way) into something meaningful that Chinese consumers can remember easily. Therefore, short numeric domain names are very attractive to Chinese buyers.
For the letter domain names, the report stops at LLLL, which I think is good. Finding meaning for an LLLL domain name is already not easy, working on LLLLL domain names or beyond is even harder. So, I usually stop at LLLL domain names too.
For the same reason, finding meaning for NNNNN is also very difficult. (Of course there are always exceptions, as illustrated in my posts dated October 4 to 6.) The reason for their popularity may be due to active trading among investors but not because of sales to end users.
The market size for each of the numeric categories is much smaller than its corresponding letter category, even though the former is much more scarce than the latter. For example, there are only 99 NN domain names but 676 LL, yet the NN category has a market size of only $159m compared with the $2.7b of LL. This may be because outside China there is not much demand for NN domain names when compared with LL.
I suggest to include 3C .com names in future reports because they are very short and are no longer available for acquisition at registration fee; instead, you must pay a premium to buy them from a secondary market. This scarcity makes 3C .com domain names liquid, in my opinion.
Finally, note that the report is based on estimation by Estibot not actual domain sales data (most sales are not reported anyway), so we may never know the actual size of each category. Still, the report provides useful insight into where short .com domain names go. If you are interested in reading the report, please visit http://ggrg.com/industry-report/.