Russia’s domain market is developing in accordance with global trends, with allowance for certain aspects. But before proceeding to description of the existing process and giving any forecasts, we should specify the players in the domain market from the point of view of business.
Any domain is registered by an individual or a legal entity (80% against 20%, respectively). Most administrators – three out of four – own only one domain. There is a small group that use the domain market to make money – these are domainers that make interesting and potentially demanded domain names, register them, and then sell in the secondary market.
In the past decade, the national .ru zone market has experienced several stages, including explosive growth that took place until the late 2013. The situation has normalized since then: the total number of registrations in the national domain zone stands now at 5 million and will hardly show a rapid growth as it was in the early 2010s. This is primarily linked to fundamental reasons: businesses have entered online markets; besides, the zone has become saturated, with registered names that are most commonly used words which precisely describe a product or a service. It should be noted that popular national domains of a number of European countries went through a similar phase several years ago.
Today, the .ru domain’s competitor is the Cyrillic .рф, which has about 800,000 registrations as well as new domain zones (.online, .shop, .club and others), whose advantage is a large number of names available for initial registration and coinciding with commonly used words.
New domains’ increasing recognizability will stimulate their further development. The list of zones will grow, among others, through adding geographic names and those that coincide with the names of brands (such as the existing .bmw, .dhl, .yandex, and others).
A professional domain investor, or domainer, has a portfolio of 1,000-5,000 domain names, of which only 1%-5% are sold per year depending on the domainer’s experience and tactics. Today, to organize deals in the secondary domain market, specialized online platforms are used that allow selling or purchasing a domain name and avoiding the risk of fraud. Such resources serve as a sort of marketplace that offer dozens of thousands of domains operated by various registrars.
The average cost of a domain name in the secondary market today is about RUR 500,000 ($7.643), although it can vary greatly and depends on various factors – actually, a domain can cost several hundreds of rubles or millions of rubles. For instance, one of the most expensive domains on sale – b2b.ru – costs over RUR 40 million ($611,790).
By Sergei Gorbunov, Director for Developing Registration Services in New and Foreign Domains, RU-Center