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Chinese Domain Market Newsletter

Recently I read an article where domain veteran Gregg McNair said 'The more friends I make, the luckier I seem to get.' That's very insightful. I remember when years ago the software company I was working for in Tokyo was reorganized, I was worried about my future. Then, a business friend in Australia sent me a newspaper clip about a local startup and suggested I wrote to them. I did and got the job. This friendship I had developed gave me an opportunity I did not know was available. Here's the post.

January 25, 2017 (Wed)

CNNIC report confirms high growth in Chinese domain market


CNNIC has just released the 39th edition of its Statistical Report on Internet Development in China (第39次中国互联网络发展状况统计报告). It's an important report because it gives us data on the Chinese domain market. This report is written in Chinse, but an English translation is usually available in a few months.

According to the report, the internet population has increased to 731 millions, which is almost the size of the entire European population. This shows how significant the Chinese domain market is. The growth rate has come down to only 6% for both the last two years, suggesting a single-digit growth may become the normal pattern from now on. Nevertheless, the penetration is only slightly above 50%, so there is still a lot of room for growth.

First, look at the size of the domain market and the breakdown.

ExtensionNumberShare
cn20,601,49148.7%
com14,345,24333.9%
net1,633,0713.9%
中国(IDN China)474,1151.1%
org330,4570.8%
info224,3210.5%
biz210,0620.5%
Others4,456,94210.5%
Total42,275,702100%

The total number of domain names registered in China has grown to 42 millions. Together, .cn and .com account for over 80% of the domain market. Therefore, if you want to invest in the largest pool of buyers, .cn and .com may be your best choices.

Overall


This chart shows the trend of the entire market over the last 10+ years. It grew at 36% in 2016. Take note of this growth rate and then realize that there are 77 million companies in China but a tiny number of them have websites (4.8 million). Here, you have a recipe for great demand for domain names.

.cn


The growth rate of .cn dropped significantly from 48% in 2015 to only 26% in 2016. However, because the growth rates in the last 5 years were quite erratic, I'm not too concerned with this issue. Still, this extension is growing fast and I think it will remain as the leader in terms of number.

.com


Unlike .cn, the growth rates of .com were quite consistent in the last 5 years -- at about 30%. This suggests we can still expect high .com growth in the future. As both the current and next generation leaders of internet companies in China are obsessed with .com, this extension will remain as the leader in terms of prices.

New extensions

I compared the "Others" category of 2015 with 2016 and found there's big difference: 1,396,346 versus 4,456,942. It's likely the "Others" category included a large quantity of new extensions. I hope CNNIC will add this information in future reports so that we can compare and track changes in new extensions over time.

About your landing page


Look at this chart I lifted from the report. The percentage of people using their mobile phone to access the internet has continued to increase, from 24% in 2007 to now 95.1% in 2016. What it means is that if you want to sell to China, make sure the landing page of your domain name is designed with the "mobile first" philosophy. Remember that China skipped the PC era to become a mobile first nation. Test your landing page from a mobile phone and make sure it loads fast and the font size is big enough for reading.

In short, the Chinese domain market is still in the high growth period to offer many opportunities to domain investors.


Note:
  • The report in Chinese can be downloaded from http://www.cnnic.net.cn/hlwfzyj/hlwxzbg/
  • Past reports in English can be found at http://cnnic.com.cn/IDR/ReportDownloads/