Kassey Lee examines the growth of internet users and consumers in China.
Many companies buy a domain to operate a digital store to sell products or services to consumers. These stores need consumers. The more consumers you have and the more affluent they are, the more demand for domains you can expect in the long run. Therefore, it’s worthwhile to look at the digital consumers in China to see how the market will grow.
Below is a chart of the growth of internet users in China over the last 20 years. You can see a very healthy pattern.
Source: Data compiled from CNNIC reports
In 2020, China’s internet users grew by 9.4% to 989 million. This represents a penetration rate of only 70%. This means they will continue to grow before they are close to the 1.41 billion population in China.
However, the number alone is not sufficient. You also want to see that the internet users buy products or services. In 2020, 79% or 782 million of the users bought goods or services from the internet. In other words, there are 782 million digital consumers in China.
To better understand the magnitude, compare the number against Japan. The number of China’s digital consumers is more than 6 times the entire population of Japan. This is massive!
In conclusion, the long-term prospect of demand for domains is excellent because China has a very large pool of digital consumers who are affluent and want to buy products or services in the digital economy.
Bb says
Could this favor the growth of .TOP domains?
Kassey Lee says
It favors the domain market overall, but the impact on individual extension may vary. I can do a study on .top and write about it if I can find such data in the future.
Andrew Allemann says
I don’t think any data on .top will be useful. Its driven by cheap promotions.
Kassey Lee says
I like to be open-minded because the market can change and .top may have its place one day. A new investment theme based on .top may start a new boom, similar to what we saw in 2015 when Chip became the talk of the town. Here’s a lesson I have learned not to discount what I don’t understand. 5N .com domains, in all my studies, point to no or little utility value to corporate China, but they sell — and some sell for even 5 figures. I just have to accept that I am still ignorant of the domain world.
Bb says
Thnks for your comments. I’m buying hundreds of one-word premium .TOP in English and I’m surprised by the number of visits (higher than many other extensions including xyz). It would not be strange that .TOP is dedicated to promoting its extension nationwide in its internal consumption plan.