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February 14, 2017

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GGRG Report Says Chinese Buyers Gobbled Up a Bigger Piece of the Liquid .COM Pie in 4Q-2016 - Current Quarter Forecast Also Included

Domain brokerage and consultancy GGRG.com has just released their latest  free quarterly report breaking down aftermarket sales of "liquid domains" (short .com domains that are relatively easy to sell at prevailing market prices). The new report (.pdf file) covering the 4th quarter of 2016 that I received from GGRG founder Giuseppe Graziano noted, "China continued to gain significant market share in the last quarter of 2016. Chinese registrants were the only net gainers of liquid domains, with owners in the US, Europe and rest of the world losing approximately 10% of their share. The biggest ownership change came in the 4L .com category ("L"= letter, "N" = number), with China adding over 45,000 domains, or 10% of the category."

Graziano added, "While China is leading the market with over 50% of the registrations in 2N, 3N, 4N and 5N .com, the US is still the market leader for 2L and 3L .com domains, the two most developed categories . This suggests that while Chinese investors are clearly leading investor demand, US companies are still the ultimate end user of liquid domain names."

The report's Executive Summary section includes some interesting sales data. It notes, 

GGRG Founder Giuseppe Graziano

"Disclosed sales increased 12% to 5,455 domains sold, and total sales volume increased 7.7% to $5.48 million. Transactions of top tier domains typically remain undisclosed with the exception of HG.com (rumored to have sold for $3,770,000 to a Chinese company). There were no recorded transactions of LL, NN and NNN .coms in Q4-2016."

"The increase in sales volume came mostly from lower tier categories like 4L and 5N .coms. As predicted in our Q3 forecast, these categories seem to have reached a support level: 5th percentile values increased 6.51% for 4L .com and 8.27% for 5N .com. Transactions of 3L .com domains registered a notable 57% increase in number of units sold; the increase in supply however translated into a sharp 17% decrease of the 5th percentile values, which decreased from $18,200 to $15,100. The number of disclosed 4N .com transactions was unchanged from last quarter (11 domains sold), but sales volume almost doubled, increasing from $259,936 to $512,983."

Image from Bigstock

Looking ahead, the GGRG report sees this for the first half of Q1-2017: "We forecast a decrease in investor demand due to 1) the slow period around Chinese New Year; and 2) the increased activity in bitcoins, an investment alternative to domain names for Chinese buyers."

"In terms of market opportunities, LN & NL domains still appear to be undervalued because their retail price is quite low in relation to their scarcity (520 domains) and high development index (27.31%). The low concentration index, the lowest among liquid domains, suggests that this category is one of the least susceptible to market manipulation and therefore unexpected surges in supply."

"Also, since end user demand does not seem 

to favor domains with Chinese Premium letters, domains with vowels seem to offer better prices than their Chinese Premium counterparts."

(Posted February 14, 2017) 

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