Grandseeds

Will China's IPO darling SMZDM raise values of 5L acronym domains?


July 20, 2019 (Sat). Many years ago, you could pick up a 3L (letter) domain for $100 but now it costs 5 or 6 figures. Similarly, 4L domains had little interest but now every one of them sells. Obviously, now the same question comes to 5L domains. With the IPO of SMZDM few days ago bring 5L domains to the forefront?

Investing in acronym domains is tricky. For word-based domains, it's fairly easy to identify potential buyers by simply doing a search on the internet using the word. This may not work in the case of acronym domains. Often, they are used as upgrade for a company with a long name. For example, the drone maker being drawn into the US-China trade war used to be called Da Jiang Innovations. It acquired DJI.com in 2013 for $300,000. Doing a search on the term "dji" would most likely not point you to this company.

SMZDM is the English brand for the Chinese startup Shen Me Zhi De Mai (什么值得买=what’s worth buying). It began as a blog by Guodong SUI (隋国栋) to review products but soon attracted a lot of interest among shoppers looking for bargains. In 2010, Sui turned it into a company and SMZDM.com as its corporate domain. Interestingly, SMZDM.cn and SMZDM.com.cn were registered together a year later, which both forward visitors to SMZDM.com.

Sui probably though the Pinyin name is too long so he did not register Shenmezhidemai.com (registered 2011) and Shenmezhidemai.cn (registered 2014), which apparently belong to some domain investors after they noticed the presence of the company.

What can we learn from this story? First of all, .com is king in China as evidenced in SMZDM.com being placed as the corporate domain. Also, .cn is still important and securing and deploying SMZDM.cn is a wise move. SMZDM.com.cn is worth it for brand protection though not important as .com.cn is minor in China. Considered as a brand, SMZDM is actually too too long consisting of 5 Pinyin words and 14 characters, considering that 2-pin is the most popular style and even 4-pin Alibaba is nicknamed as 2-pin "Ali".



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