Driving demand for domains in China — Direct visits

Kassey Lee reviews data regarding how people in China visit websites.

Image of man typing on his laptop with the words "Direct Navigation"

I often hear that domains are no longer relevant since consumers simply go to their search engines for anything they want to find. This, if true, must be detrimental to domain investment. Unfortunately, I could not find much data to support or reject this idea – except in China.

Baidu collects visitor data of more than 1.5 million websites every month since 2012. Based on this data, I have created the following table to give you a big picture of how Chinese consumers access websites.

Graphic depicting traffic to websites recorded by Baidu

As stated by Baidu, website visitors may arrive using one of the following methods.

Direct visit: Visitors explicitly specify a domain in the browser.
Referral: Visitors arrive via a link from another website.
Search engine: Visitors arrive via a search engine.
Directory: Visitors arrive via a directory of websites.
Social media: Visitors arrive via social media such as WeChat.

As you can see, direct visit accounts for the largest share of web traffic in China. It has also been increasing — from 39% in 2012 to 45% last year. Search engine is doing well too, rising from 27% to 30%. Referral, on the other hand, is trending down. Finally, directory and social media can be ignored since they each account for less than 1% of web traffic.

Focusing on direct visit, it shows that Chinese consumers remember and specify domains in a browser to visit websites. This implies that domains that are easy to remember are notable. What are the characteristics of such domains? Short, meaningful, memorable – and on .com extension, which is king in corporate China.

Examples can be found in the 10 listed firms covered by the latest “2019 Q2 Performance of Listed Internet Firms in China” note (2019年二季度我国互联网上市企业运行情况): Alibaba (Alibaba.com), Tencent Holding (Tencent.com), Meituan (Meituan.com), Jing Dong (JD.com), Baidu (Baidu.com), Netease (Netease.com), Tencent Music (TencentMusic.com), Pinduoduo (Pinduoduo.com), 360 Total Security (360.com), and Ctrip.com International (Ctrip.com). They all own their brand-matching .com domains.

Big brands understand this consumer behavior and so the importance of domains. Therefore, they are willing to invest a lot in domains. For example, Jing Dong shelled out $5 million for JD.com and 360 Total Security reportedly paid $17 million for 360.com. A few months ago, Hong Kong-based blockchain startup Block.One stunned the domain market with a $30 million purchase of Voice.com. Corporate China is ready for expensive domains.

In summary, direct visit by Chinese consumers will continue to drive demand for domains, and so memorable brand-matching .com domains will do very well in China.

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