Kassey Lee explains why two-letter domain names aren’t valuable in China just because they are rare.
Recently a domain investor asked me if ST has any meaning in Chinese. That got me thinking about 2L (letter-letter) domains in general. In fact, 2L domains are very valuable not only because they are scarce, but also, in China, they are unique in the Chinese culture.
I remember when I was growing up in Hong Kong, names that I came across consisted of mostly two Chinese characters — in other words two Pinyin words. Examples are big bank Hui Feng (汇丰 = HSBC), supermarket Bai Jia (百佳 = PARKnSHOP), city name Xiang Gang (香港 = Hong Kong), and even movie star Cheng Long (成龙 = Jackie Chan). It’s a 2-pin world.
This is also reflected in corporate China. If you look at the 2018 Top 100 Chinese Internet Companies list, you’ll see that 37 companies use Pinyin domains, ranging from 1-pin to 4-pin as follows: 1-pin (5%), 2-pin (79%), 3-pin (11%), and 4-pin (5%). 2-pin domains are clearly sought after by corporate users.
The love for 2-pin can be seen in the extreme case of Alibaba. The name “a li ba ba” (阿里巴巴) is 4-pin but Chinese consumers prefer 2-pin, so Alibaba is also nicknamed “Ali” (阿里). This shift can be seen in many Alibaba sub-brands such as AliExpress (AliExpress.com), AliSports (AliSports.com), and AliTrip (AliTrip.com).
How does preference for 2-pin relate to 2L domains? A 2-pin name can be shortened to a 2L domain by using its acronym, which is the ultimate domain upgrade for corporate China. A good example is Jing Dong (京东), the third largest internet company in the world according to Wikipedia. It owns JingDong.com but its corporate domain is JD.com. Another example is Bai Lian (百联) using BL.com as its corporate domain.
See it from the other side, 2L domains are very versatile and can be used to create a variety of Chinese brands for different business fields. For example, ST can be the acronym for more than one hundred 2-pin names, such as Shi Tu (师徒 = master and disciples) for education, Shi Tu (视图 = view) for video, and San Tong (三通 = three channels) for media.
In short, 2L domains are very valuable in corporate China.