When I mentor exchange students from my alma mater, I always encourage them to reach out and talk to people of various cultures because there is a lot that we can learn from them. Based on my own experience, for example, Americans excel at public speaking and having fun; Japanese are very good at team work; New Zealanders love the nature; Scottish people are thrifty and hard working; Indians are good at small businesses; Jewish people see money opportunity in every situation. What about Chinese? I'd better let you tell me. Here's the post.
August 5, 2016 (Fri)
The contrarian thinking of a .top domain investor
Most domain investors don't like an extension when many of its domain names are reserved by the registry. That's quite easy to understand, because the registry gets to make the biggest profit. However, an investor looked at it from a different angle and started a successful investment in .top domain names.
During the World Domain Conference 2016, Qi Yuan CHEN (陈麒元) revealed his .top domain investment strategy in an interview by West.cn. According to Namestat.org, .top is the fastest growing and also the second largest new extension. Total registration has reached 2.98m since its launch in December, 2014 by the Jiangsu Bangning Group in China.
Chen first came across domain names more than 10 years ago, but for some reason did not pursue the investment idea. In January, 2015, he wanted to develop a website so had another look at domain names. Frustrated by lack of good names on traditional extensions, he turned to the new extensions, registered some, then started to do research about them.
Having invested in stocks, futures, and other asset classes, he realized there was big investment potential in the new extensions. He settled on .top, and the reasons were: (1) "top" is a common word understood in China as well as many other countries; (2) in early 2015, there was little interest in the new extensions so .top domain names could be bought at low costs, giving more upside gain; (3) the registry is run by a company well equipped to promote the extension; and (4) the registry had reserved a lot of .top domain names.
The 4th point is perhaps the most unconventional idea. His argument is that if a registry is going to promote an extension, it needs very good quality names so that they can reap the biggest profit after big promotion. If domain investors get to keep the best names, the registry will be less inclined to promote the extension. If they don't promote it, the extension will not be accepted by the market. That's his thinking anyway.
Speculating that the registry would aggressively promote the extension, Chen bought many .top domain names. Within 6 months after he started, more and more investors came to .top and prices started to rise. For example, in February, 4N without 04 were sold at about $15 (100 yuan) a piece. As .top was actively promoted and became more and more visible, their prices rose by 10 times to more than $150 (1,000 yuan) by September, 2015, then $450 (3,000 yuan) this past February. Chen has a pot of gold now.
His advice is investors is to use only extra money that you need. Buy some domain names that are still low in prices so there is room for price increase. His own strategies are two: (1) premium: single letter (such as a.top), 2N (88.top), 3N, 1-pin (Che.top), English (Love.top). (2) Bulk trading: 4N and 5N. Premium are for long term investment—to wait for end users because holding cost is very low for .top. Bulk trading. however, requires large amount of capital and holding cost is high.