Chinese domain market: the next 30 years

Jack Ma in a recent speech talked about the 50-year growth pattern in a technological revolution: the first 20 years are all about the technology itself and the next 30 years about application of the technology. He pointed out that the internet has just finished its first leg and is now being increasingly applied to every aspect of our lives.

This means many companies will spring up to incorporate the internet technology in products and services to meet demand from consumers.

The scene in China echoes what Jack Ma has described. The State Administration for Industry & Commerce reported that 4 million new Chinese companies were formed in just the first 9 months of 2016, showing a 27% growth over the same period in 2015. [1]

Since businesses underpin the growth of the domain market, let’s explore the fundamentals driving business growth.

The fundamentals

Large population. The USA has 323 million population with 27 million companies. China has a population more than 4 times that of USA but only 77 million companies. With the Chinese economy continuing to grow faster than the USA, we can therefore expect large growth in Chinese companies. [2] [3] [4]

Savvy internet users. China has the largest number of internet users in the world: 710 millions. With a penetration rate of only 51.7%, there is room for massive growth. Equally important, these are savvy users who have skipped the PC era and moved right into the mobile age. Their demand for sophisticated products and services will spur major business growth. Ironically, iPhone’s largest market is not USA but China. [5]

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