Kassey Lee discusses RCEP and what it could mean for domain names.
I have been busy reading about RCEP in the last few days. I think it could have a positive long-term impact on demand for domains in China.
RCEP stands for “Regional Comprehensive Economic Partnership,” which was signed on November 15 to cover the 10 Southeast Asian countries and South Korea, China, Japan, Australia and New Zealand. Once ratified by member countries, the pact will formally enter into force in 2021.
This pact signals Asia’s rise as an economic powerhouse, as evidenced by the joining of even the traditionally “western” countries Australia and New Zealand. The 15-member group already accounts for about 30% of the world population and 30% of the global GDP, and it is expected to become the largest economy in the world.
This agreement also suggests the arrival of the largest digital economy in the future, which will become the dominant venue to do business. Domains will increase in demand because they are the foundation of any digital economy.
RCEP is not just about tariff removal and free trade. It also means the creation of common standards. For example, intellectual property rights registered in a member country will be recognized by all member countries of RCEP. The common standards will encourage domestic companies to go across their national borders to do business in other member countries.
Chinese companies have long been encouraged by their government to go outside of China. Top companies such as Alibaba, Tencent, and JD.com are heavily invested in Southeast Asia. RCEP will make it even more appealing to go global and expand into the RCEP region.
Going global will drive Chinese companies to adopt .com in general and English-based domains in particular because .com is the global extension and English the global language. I have seen many Chinese companies already using this domain strategy, such as Netease.com, Ctrip.com, and VIP.com. .Com is already the most preferred extension in corporate China. This trend will only intensify because of RCEP.
For domain investors in the west, the implication of RCEP is that it will increase demand for English-based .com domains in China. Therefore, if you have such domains, make sure they are exposed to and can be easily bought by end users in China. For details, read my article “How to sell domains to China“.