China is home to some of the greatest wealth in the world, but converting that wealth to investment has long been a challenge to its citizens. This obstacle has fueled the growth of many alternative investments in the past. Domain names have long been a core alternative investment for those in the know. Monthly reported sales are often over $20 million and unreported sales are estimated to be much higher.
Domain names that fit the Chinese buying criteria are traded like commodities now. Tens of millions of dollars are being put into domain name investment and the train doesn't look like it's stopping any time soon.
As Tracy Fogarty of eNaming points out, "Domain name sales is an established trade going back over two decades now. Regulators are probably not looking at domain names with a jaundiced eye because they do not have the same potential to disrupt traditional banking systems."
Today is different, with numeric and short domains (often unpronounceable to the Western world) defying all traditional domain-name investment logic and shattering record charts. For example, according to DNJournal:
989.com was just sold for $818,181.
899.com changed hands for $801,000.
588.com grabbed $1,000,000.
Public companies earn millions from domain name auctions and sales every year. It has an extremely liquid market with thousands of wholesale buyers. No customs declaration. No property taxes. No annual fees. Ownership privacy. If there was ever an asset made to handle Chinese wealth, it was domain names.
Will it last? Who knows. But even if values do back down a little, there seems to be a pool of investors willing to buy in. If there's any good time to learn Chinese and the importance of numbers and characters in the Chinese culture, it's today.