China loves a gTLD

10th July 2017

Oli Hope

Oli Hope
Director of Registry Services

How often do we overlook the fact that the internet operates in English? This works well for those of us with English as our language of business and communication, but what about the millions who grow up with a different mother tongue? Worse still, what about those nations who don’t even use the same alphabet?

The internet has been exclusive for some time, but new gTLDs have thrown open the doors to the web; is it little wonder that the market has been turned on its head?

When applications opened for the new gTLDs in January 2012 it provided an opportunity for those without English as a first language to bid for domain names that better suited themselves, their audience and/or their customers. When the new gTLDs were launched later in the year, many countries across the world suddenly gained a more inclusive space on the internet. The industry wasn’t sure what to expect and few predicted that the new gTLD story would turn out to be a Chinese one.

China accounts for almost half of all new gTLD registrations, with six times more registrations than the US and a whopping twenty-nine times more than the UK [ntldstats]. Anyone with a distinctive new gTLD will have been approached by Chinese investors and even back in 2014 – just two years after the new gTLD introduction – 86% of Chinese thought they were a good idea and 46% had considered purchasing one [Sedo].

With such a vast population, percentages like this translate into a large amount of people and a lot of registrations. Couple this with frantic economic growth and high internet penetration, it’s easy to see why so many Chinese are snapping up new gTLDs.

There are also other facets of the China story that make it unique. In a country where the government strictly controls investments and the populace are incredibly entrepreneurial, new gTLDs are attractive investments. An indication that many of these new gTLD registrations have been for investment purposes as so few of them are operational as websites. Only time will tell if these will eventually be used by their Chinese owners or sold on to the highest bidder.

Youngsters today have more money than the previous generation and recognise the power and impact of the internet. Some snap up domain names as investments, some for a gamble, and others just for something to do.

Aside from the investors and speculators, there are many who seek domains to meaningfully develop their business within China. The new gTLDs have presented an opportunity to create a domain name that will be recognised by the everyman living in the outlying villages, far from the Westernised hotspots of Beijing and Shanghai. This is one of the reasons that .vip has become so popular – it is one of the few English words that has become ingrained in Chinese society and would be recognisable to almost anyone in the country. Similarly, two- and three- letter domains are popular, as are pinyin (writing system for Mandarin) domain names that provide immediate understanding for non-English speakers.

Numeric domain names have also been popular; to understand this, one must appreciate the Chinese culture. The Chinese have a great reverence for numbers and are incredibly superstitious. Eight is deemed lucky, four is not, and they will pay highly to ensure they have a ‘good’ mobile phone number or bank account number. The same applies to new gTLDs.

It is important to break down the mystique that surrounds the incredible domination of China in the new gTLD market; is it unsurprising for a country of such large numbers of people and a high entrepreneurial streak? It is also important to understand the way in which the Chinese think about and approach the new gTLD market so registrars better serve their Chinese customers. It would also be pertinent for those hoping to do business in China to be aware of how much hinges on having the right domain name to reach the vast, diverse and sharp-eyed populace.

Some predict that the Chinese bubble will burst, but five years on from the new gTLD applications and their enthusiasm shows no signs of abating. Statistics hint at sustainability if not further growth as the Chinese internet market thrives; they gained 43 million users in 2016, the equivalent of the whole of Ukraine getting online [China Internet Network Information Centre].

As we approach the next round of applications for new gTLDs (expected in 2019), all eyes will be on the Chinese market to see if the trend will continue and whether the rest of the world can keep pace. Perhaps a challenge to the dominance of English-speaking nations on the internet is overdue? It could pave the way for the web to become the global, borderless space it was always envisaged as being.