This year has seen some phenomenal growth in the domain name world as the total number of registrations powers towards the 330 million mark. There’s no secret that the catalyst for the unprecedented growth is coming from China as registries – especially those within the new gTLD program – look east to grab the attention and cash of the Chinese domain name investors. Over 54% of all new gTLDs belong to Chinese registrants, but events over the past week could see that number rise even further.
Last week, we were talking about the incredible registration numbers in the first few days of dotVIP’s General Availability. Over 139,000 domain names were registered in the first 24 hours, thanks to some aggressive marketing and price promotions by major Chinese registrars such as Chengdu West and Alibaba Cloud. Registration numbers have continued to grow at around 5,000 names a day since, making it the 15th most registered new gTLD as of the end of May.
However, the incredible growth of dotVIP looks to have been a mere drop in the ocean compared to the performance of the two most registered new gTLDs – dotTop and dotXYZ. DotTop has added over 50,000 names to its registration zone in the past two days, but that pales into insignificance compared to the growth on 1 June alone in the dotXYZ registry, which added almost 800,000 domains* in just 24 hours. The number one new gTLD already had close to three million registrations, but announced late last week that it would be offering domain names for just a couple of cents to celebrate its second birthday. Uniregistry announced that it would be selling dotXYZ domain names for just 1 cent, whilst West.cn was offering them for 20p for two days and 40p for the rest of June.
It’s no wonder that registration numbers have gone through the roof. A number of Chinese registrars now offer bulk availability checkers to attract the domain investors who are looking at large volumes of registrations, and whilst XYZ may only see around $20,000 based on the average price points on offer, if only a small fraction of those names renew in a year’s time then they will have their return on investment.
At some point, the bottom will fall out of the market and hundreds of thousands of these registrations will simply not be renewed. Domain names do have a scarcity value, but when supply is restricted within a particular product or market, consumers will look elsewhere. So if domain investors are hording domain names within a particular TLD and buyers aren’t willing to pay a premium for them, they will simply move onto a different one.
* www.NTLDStats.com – total count of unprocessed domains plus domains within Zonefile.