Do you sometimes have the feeling that you arrived �just a couple years late� on the Domain Trading scene? Nostalgic for the days when great domains were available for the taking by anyone with sufficient foresight and the chutzpah to ignore the naysayers? If you miss the adrenaline rush of a highly speculative investment�and the promise of astronomical returns that goes along with it�maybe you�re better off straying from the tried and true �.com + traffic = $$$� formula.
Instead, consider China: at approximately 1.29 billion people China is the world�s most populous nation, yet Internet penetration and ecommerce are still in the developmental growth stages. Major corporations in industries ranging from computers to automobiles are placing big bets on China�s future potential. So, how do things look from the domain perspective?
In this article, Tim Schumacher, CEO of Sedo, who recently returned from an extensive tour of China,
Matthew Bentley, Sedo�s Director of International Operations and
Hong Fang, responsible for the Chinese market at Sedo, provide you with an in-depth look into the Chinese Domain Name market.
Having claimed the title of world�s most
populous nation, the Chinese are now rushing to also become the
world�s largest Internet nation. According to statistics released
by the China Internet Network Information Center, China, with
nearly 80 million Internet users, currently trails only the USA and
Japan. With the number of Internet users growing at
around 5% a month, a household penetration rate of 25% percent is
conceivably only three or four years off. Furthermore, with
China�s recent accession to the World Trade Organization (WTO)
the economy is taking great strides towards global accessibility.
Unfortunately, the size of the Chinese Internet population, even
though it is already the second largest in the world, does not mean
that it will immediately make a large contribution to the e-economy,
said Lu Benfu, Director of the Internet Development
Research Center at the Chinese Academy of Sciences. He based his
conclusion on the following reasons: First, online consumption is
closely linked to netsurfing time, as purchasing power emerges only
after a person's accumulated netsurfing time outstrips a specified
figure. Second, people aged 16 to 34, the age span of China's
leading Internet population revealed by the survey, do not
constitute society's major consumption groups. Third, the scattered
geographical distribution of urban and rural populations in China
limits the market expansion of e-commerce, which mainly prospers in
The number of web
sites is also rather small compared to the huge amount of Internet
users. While large consumer web sites like search engines, portals,
email and mobile phone sites � with 163.com and sohu.com
leading the pack - are extremely popular, the total number of web
sites is still rather small. Currently, experts estimate that less
than 800.000 generic (.com/.net) plus a few hundred thousand .cn
domain names have been registered by Chinese people.
However, China is
certainly a country worth having a look at � not only from the
domain point of view.
In April 20, 1994 China
connected to the Internet via international special line. On May 21,
1994, the China Science Technology NET (CSTNET) began to
provisionally offer domain name registration to Chinese users. In
June, 1997 the China Internet Network Information Center (CNNIC)
CNNIC is China's
registration administrative organization. It is a non-profit
organization of administration and service, performing duties of the
National Internet Network Information Center. The management of
CNNIC is handled by the Computers Network Information Center of
the Chinese Academy of Science. CNNIC operates under the
auspices of China�s Ministry of Information and Industry (MII),
an agency that also oversees telecommunications, multimedia,
broadcasting and satellite transmissions across China.
CNNIC is responsible for administering and
managing the .cn domain, and also oversees all .cn domain name
registration services to registrars and resellers within China.
Under the current policy, .cn domain names are available for
registration worldwide. Previously, only registrants located in
China were able to register a .cn name. CNNIC is also moving to an
EPP-based real-time registration system and they have moved to a new
competitive registrar model, allowing sales agents to register .cn
domains. Any business or organization worldwide can register a .cn
name under a new liberalized policy that no longer restricts .cn
registrations to Chinese entities.
has posted a policy regarding intellectual property disputes on its
website. The policy is very similar to the Uniform Dispute
Resolution Policy (UDRP) adopted by ICANN.
According to the China Internet Network
Information Center, online shopping and ecommerce accounted for less
than 1 percent of online activity in China. Instead, users went
online primarily to obtain information, such as news, instructional
content, or ebooks.
The Chinese written language is based on a
sign language, having thousands of different signs for different
syllables, e.g. �
�for DOMAIN, pronounced �yu ming� in Pin Yin language
(Pin Yin is the standard latinized phonetic spelling of the Chinese
language, it can help not only Chinese but also foreigners to learn
So, when a western traveler visits china, the
only thing he or she can usually read on signs, in newspapers or in
the streets, are named using �Pin Yin� � they are written in
Latin characters and visibly stand out of the usual Chinese signs.
So, it is usual that the domain names are named by �Pin Yin�,
e.g. Beijing.com,�Beijing� being the Pin Yin of �
�. Among the
various TLDs, .com names are the most popular (with .net and
.org far behind), but .cn and .com.cn are catching up.
Therefore, companies should, if possible, register all available TLD
In China, as in other markets, the ideal
domain name is short and easy to write. However, since many Latin
characters are not meaningful for the average Chinese, some sites
have successfully developed on domain names using numbers rather
than letters. Among the top 20 Chinese language sites (according to Alexa)
are 163.com, 3721.com, 21cn.com, 17173.com, and v111.com.
These might look like worthless domains to the western-minded domain
investor, but in China they are often preferred to words in English
or other Latin-script languages.
domain names are becoming popular in China. This allows users to
register not only domain.cn, domain.com, domain.org but also
.org are valid.
secondary market for domain names in China currently isn�t
huge, but it can be expected to grow substantially in the upcoming
years. Organized platforms are � in addition to the global domain
trading platform Sedo,
which also has many Chinese customers � Eachnic.com and DomainPricing.com.
The prices for domain names are�as with the prices for other goods
in China�generally lower than in most other parts of the world.
Recent High Profile Chinese
Sources: 1351.net, Sedo.co.uk
All three companies conduct appraisals for domain names and domain
escrow services. In addition, through a global cooperation with Google
AdWords, Sedo is able to offer domain parking specifically
targeted at the needs of Chinese customers.
of a .cn domain name from one registrar to another is allowed, but
domain names registered through China-based registrars cannot be
transferred into non-China based registrars, and vice versa. Domain
names cannot be transferred within the first 60 days of initial
registration. Also, domain names scheduled to expire in fewer than
14 days will not be allowed to transfer. These rules are based on
the fact that .cn does not have auto-renewal for expired names.
There are no specific rules for registrant transfers, they are
handled just like .BIZ and .US at the Registrar level.
deletion rules: Only a sponsoring registrar can initiate the
deletion of a .cn domain name. If the deletion is initiated within
the 15-day additional grace period, the name will be immediately
made available for registration. If a deletion is initiated after
the 15-day add grace period, the name will be put on a five-day
"Pending Delete" status. If a domain name registration
expires, the name will be put on a 15-day "Pending Delete"
status. All non-expired domain names have a five-day "Pending
Delete" status. When a domain name expires, it is immediately
placed on HOLD and taken out of the zone files.
China, there are many companies around that provide domain
registration, web hosting and other web services. Some of them,
however, are only providing local service or serving niche markets.
The domain industry structure is more concentrated than in the U.S.,
but less concentrated than for example in Germany.
the top players, HiChina Web Solutions Limited, formerly
known as Civilink International Information Technology Co Ltd., is
the leading web hosting and domain name services provider in China,
having registered over 300,000 domain names and currently hosting
one fourth of all the web sites in China. It also operates the
domain name secondary market Eachnic.com.
other companies competing in the field, DomainPricing.com, which
belongs to the company Xiamen Jintong Science and Technology Ltd
(established in 1996 in the city of Xiamen), offers domain
registration, web hosting, web design, e-commerce. Furthermore,
Intonet.com.cn from Jinan (Shandong province), Hotsales.net
and Shesp.com from Shanghai, China-Channel.com
from Beijing and Hzst.com located in Hangzhou, are
among the mid-size players in the market.
� 2003 Sedo.co.uk
Our thanks to Tim Schumacher, Matthew Bentley and Hong Fang for their
work in producing this article. If you would like to comment, write [email protected].
Mr. Schumacher and Mr. Bentley were also the
authors of a special report for Domain Name Journal on the German
domain market that you can read in our Featured
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