Chinese Government Approval For .CLUB, .VIP and .XYZ Means Further Big Growth Opportunities

china-national-emblemThe Chinese government’s Ministry of Industry and Information Technology has given official approval for the .club, .vip and .xyz new gTLDs meaning they can now apply for relevant local licenses to be hosted within the country. Previously only .com and .net operated by Verisign had this official approval.

It’s a hugely significant opportunity for the three new generic Top Level Domains as previously registrants were required to host their domain names in these gTLDs outside the country. China already accounts for at least 40% and possibly around half of all registrations for all new gTLDs. However one probable trade-off is that the Chinese government can order domain names, and hosted websites, to be deleted it doesn’t approve of.

The three gTLDs are among the top ten when it comes to registration numbers. According to nTLDstats.com, .xyz is the largest with 6.671 million registrations while .club is the fifth largest (881,300) and .vip ninth (531,500) accounting for almost 3 in 10 (29.89%) of all registrations.

China’s significance can be shown by it accounting for a growing number of registrations, both for new gTLDs and legacy gTLDs, particularly short domains and even more so short numeric domains, and all three new gTLDs having offices there.

While there are almost twice as many .cn domains registered within China than .com – around 20 million .cn compared to 11 million .com, .com domains attract higher premiums from investors according to the Coreile Letter blog with .com being considered a “door to the world [for] a Chinese enterprise, and every Chinese company aspires to have a ‘grand’ entrance.”

Additionally, many numbers rhyme with Chinese characters. Coreile gives the example of “520” that “rhymes with (sounds like) the Chinese characters 我愛你 (I love you), which is perfect for a dating website.” And the third reason given by Coreile is that Chinese companies like to use acronyms for their domains, practice not as common for western companies. “For example, Jing Dong upgraded from JingDong.com (and 360buy.com) to JD.com and Zhu Ba Jie from Zhubajie.com to ZBJ.com. This is possible because these acronym names correspond to the fully spelled out Pinyin names. In other words, Chinese consumers have no difficulty remembering either an acronym name or its fully spelled out Pinyin name.”

According to nTLDstats.com, there are almost 12 million (11.910 million) domain names registered to registrants within China out of 27.015 million across the 1,209 new gTLDs that have been delegated, however there are also 7.390 million domains that the registrant is unknown, usually through the use of Whois proxy services. There is only one additional country that accounts for over one million registrations – the USA (2.707m).

For .club, the registry saw China as a huge opportunity even before their launch, regularly visiting the country since January 2014, months before its official launch. Since then they’ve seen significant growth in registrations from domain investors in China with more than 400,000 domains having been registered there and more than US$2 Million in .CLUB premium name sales made to Chinese investors. They are now one of only five formal government licenses for foreign domains so will be eligible for ICP (Internet Content Provider) numbers. An ICP number is required for every website hosted in mainland China.

“The Chinese market is extremely important to us, and we’ve worked very hard at understanding how the regulatory system there works and how we can work with the government as it evolves,” said CEO, Colin Campbell. “We’re very proud to be among the first foreign domain name registries approved. While we’ve already enjoyed some success in China, we now look forward to expanding the reach and popularity of .CLUB to the many businesses and entrepreneurs developing their online presence in China. Being an approved registry opens the door to great expansion for us in the Chinese market.”

The word “club” in English is widely used and recognised in China by existing clubs and small businesses, making .club a logical and meaningful domain extension. With over 140 million .com and .net names and nearly 20 million .cn names already registered, businesses looking for good, brandable names are looking further afield for new choices such as the .club new generic Top Level Domain.

Likewise MMX, operator of the .vip new gTLD, was very pleased, with CeO Toby Hall saying the “MIIT approval is a major milestone for MMX and the continued successful development of our dot VIP domain. We share the China domain industry’s opinion that regulatory approval will provide for another wave of top-level domain growth in the region. Influential Chinese registrars will now be able to market this select group of approved new gTLDs more actively to the important local Chinese SME end-market for usage. We are deeply honoured to be one of only three registries to be approved in this first round of approvals.”