China’s digital economy and domains
Kassey Lee examines the growth of online commerce in China.
I just finished filing my business tax return — online for the first time. Things have changed rapidly in recent years and I find myself moving more and more into a digital world.
Look at China. It has a massive digital (internet) economy and, within this economy, the digital (online) retail market alone has been the largest in the world since 2013, as stated by the CNNIC note (in Chinese, page 11). Last year, the market amounted to 11.76 trillion yuan (or regarding $1.8 trillion).
The following chart shows its rapid growth in the last 10 years.
Source: CNNIC notes
Digital retail is also taking a bigger and bigger share of the total retail market in China.
| Period | Digital retail | Total retail | % of digital |
|---|---|---|---|
| 2010 | 0.5 | 15.5 | 3% |
| 2011 | 0.78 | 17.1 | 5% |
| 2012 | 1.31 | 20.7 | 6% |
| 2013 | 1.89 | 23.8 | 8% |
| 2014 | 2.79 | 26.2 | 11% |
| 2015 | 3.88 | 30.0 | 13% |
| 2016 | 5.16 | 33.2 | 16% |
| 2017 | 7.18 | 36.6 | 20% |
| 2018 | 9.01 | 38.1 | 24% |
| 2019 | 10.63 | 41.2 | 26% |
| 2020 | 11.76 | 39.2 | 30% |
Source: CNNIC notes, Sohu, Statista.com, etc. Unit in trillion yuan.
So, how do these numbers connect to domains?
Well, we need to remember that the foundation of a digital economy is IP addresses that are commonly expressed in terms of domains. Therefore, we can also say that the foundation of a digital economy is domains. Generally speaking, as the digital economy grows, we can expect domains to grow too.
Therefore, the long-term prospect of domains in China is good, even if there are short-term factors, such as the overwhelming success of ecommerce platforms, slowing down firm adoption of domains and websites.
