Domains plunged 18% in China last year

Registered domains in China fell last year.

The latest report published by the China Internet Network Information Center (CNNIC) does not paint a rosy picture about demand for domains in China.

In 2020, the total number of domains registered in China fell from 51 million down to 42 million, and it occurred at a time when many businesses were moving to the digital world in order to combat Covid-19.

Look at the chart below. It shows domains registered in China over the last 20 years.

Compare the 42 million domains registered with the 4.4 million websites in China and we may conclude that investors are the largest holders of domains. This assumption may explain the three dips you can see in the chart: 2010-2011, 2017-2018, and 2020.

In 2007, a boom started when lots of investors were lured by aggressive pricing of $1 (or even less) to register .cn domains. However, the Chinese government changed its rules in 2010 and required owners of .cn domains to submit their identification information, such as a photo and ID. This upset a lot of investors, particularly those outside China. As a result, they simply dropped their .cn domains, causing the dip between 2010 and 2011.

In 2015, people got excited about Chip domains as a new investment theme that treated “Chinese premium” domains as very valuable. The bubble then burst, causing the dip between 2017 and 2018.

In early 2020, Covid-19 hit China and many Chinese investors became nervous about the domain market. The impact was felt almost across the board, causing large drops in .cn, .com, and other domains. As Covid-19 is not over yet, I don’t expect this situation to improve anytime soon. It may be worth comparing this to demand for domains in general, which soared during Covid-19 as businesses got online.

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