Chinese Domain Market Newsletter

A while ago I was busy listening to talks by Edward de Bono available on YouTube. Bono coined the term lateral thinking and he has written many books on how to think creatively to solve problems. For example, he was once asked to solve a traffic problem in a small town where commuters always drove into town and left their cars all day long, thus blocking shoppers from shopping. His solution was simple: You can park anywhere you like, as long as you have the headlights full on! Please note this will be the last post on the Chinese domain market. Shortly I'll start writing about domain names for end users. Thank you for joining the ride with me. Here's the post.

April 19, 2017 (Wed)

What do experts think of the Chinese domain market?

I wanted to write about the China panel discussion held during Domain Pulse 2017 in Vienna early this year, but could not find time until now. Below are some interesting points I picked up from the discussion. By the way, I also contributed to the panel discussion vai a video talk, giving my long term view on the Chinese domain market.

Ray Zheng, Shanghai Racent Internet Group
  • Last year over 10 million domain names were registered in China, compared with about 40 million domain names in total.
  • There are about 1.5 billion population and close to 90 million businesses in China. As each business will have its own domain name eventually, there is huge potential.
  • 2016 was great and 2017 will be even better.
  • Domain trade is very active in China. Five years ago very few people talked about domain trade on social networks, but now people share prices of domain names sold.
  • Domain names are becoming like valuable artworks, and there are online businesses which will lend you money against domain names.
  • In China, .com is first choice, followed by .cn, and probably .net for businesses.
  • A lot of individuals use new extensions such as .xyz to build websites if their names on .com or .cn are already taken but businesses still prefer .com and .cn. However, .vip, .club, and .top are also good for for a special group of customers of a company.

Giuseppe Giovanni Graziano, CEO Brokerage & Consulting
  • Very positive about the Chinese domain market
  • Only 13.93% of short .com domain names have been developed.
  • "In last quarter Q4 Chinese owners became the biggest owners. China had more than 55%, US less than that, and Europe is more like 10%, so the market is gravitating toward China"
  • Speculation is the biggest driving force behind the short-term demand that we see right now.
  • Chinese like to speculate, and investing in domain names is just another way of speculation.
  • Investors should read deep into the data so see if demand is of long term nature coming from companies or driven by speculation.
  • A lot of investors will make a lot of money in .com domain names.
  • During the boom in 2015, a lot of domain purchased in China were financed by credit -- some at interest rate of 24%.

Matthias Meyer-Schönherr,
  • The Chinese domain market is complicated and very active, but you must offer something relevant for the Chinese market.
  • Spend time to study the market.
  • eCommerce is growing rapidly. Chinese go more and more for brands. Brands need websites and therefore domain names. There is trend toward B2C so business can use their websites to sell directly to consumers.

Philipp Grabensee, Co-Founder & Deputy Chairman at Afilias
  • Speculation can be good if it leads to usage and awareness of domain names.
  • To do business in China, spend time in China and develop relationship.

It's interesting Giuseppe's 13.93% figure parallels my study of only 12% domain names developed into websites in China. (See My long term view of the Chinese domain market is great, because of the massive force provided by the huge economy in China.

You can watch the China panel discussion here: