New policy expected to boost domain name trading

In Việt Nam, ‘.vn’ is the country’s code top-level domain.  — Photo hostingviet.vn

 Compiled by Thiên Lý

The Ministry of Information and Telecommunications has issued a circular with new provisions which are expected to create resources to develop the domain name market, Đầu Tư (Investment) newspaper reported.

Circular No.21/2021/TT-BTTTT, which supplants an earlier one on the management and use of internet resources, regulated the creation of three more second-level domain names, it said.

A second-level domain is part of a domain name or website address that comes before the top-level domain.

In Việt Nam, ‘.vn’ is the country’s code top-level domain.

A country code top-level domain (ccTLD) is an Internet top-level domain generally used or reserved for a country, sovereign state, or dependent territory identified with a country code.

The three second-level names are ‘ID.VN’for individuals to register the use of images, products and personal trademarks,‘IO.VN’ for institutions and individuals to register the use of digital technology applications, platforms and services, and ‘AL.VN’for individuals and firms to register their operations and services related to artificial intelligence.

A spokesman for the Việt Nam Internet Network Information Centre (VNNIC) said the addition of three more second-level domain names would create new domain name spaces, making the system more appropriate for modern technology and user-friendly, thus helping expand the use of domain names.

The domain name space consists of a tree data structure. Each node or leaf in the tree has a label and zero or more resource records, which hold information associated with the domain name. The domain name itself consists of the label, concatenated with the name of its parent node on the right, separated by a dot.

The spokesman also said he believed the new circular would create a new leaf for the domain name trading market and speed up digital transformation in Việt Nam.

Analysts agreed, saying 2022 is likely to be a breakthrough year for the domain name trading business in Việt Nam, thanks to the positive changes in policies and strong digital transformation underway in all sectors.

Internet role

VNNIC is the domain name registry for ‘.vn’.

In 2013 Dot VN, Inc. signed an agreement with it to market the .vn domain name abroad. Now .vn domain names can be registered from anywhere in the world through a global accredited registration system.

Over nearly a decade the use of the national domain name has developed rapidly, with the number reaching 544,361 in 2021.

The .vn domain name ranks in the top 10 in the Asia – Pacific and 44th in the world in terms of number of domain names maintained in use.

.vn domain names with 1 or 2 characters are registered through an auction.

An internet resource report released last year said nine out of 10 enterprises in the list of most powerful brands used the .vn domain name.

Another statistic from Domain Name State, LLC said 940,709 international names had been registered in Việt Nam as of October 2021, with more than 680,000 provided by domestic registrars.

Analysts said one reason for a sharp increase in the use of .vn is the rapid development of the internet infrastructure and the increasing use of the net in the country.

The 2021 Internet and Internet Resources report said Việt Nam had 660 networks using IP address or Autonomous System Number that connect to become the Vietnamese Internet system. The figure represented a rise of 20 per cent from the previous year.

As of November 2021 the country had three National Internet eXchange (NIX) centres based in Hà Nội, HCM City and Đà Nẵng and an expansion centre at VNPT in HCM City.

The total connection bandwidth reached about 400Gbps with 50 member networks.

The report pointed out that the application of Resource Public Key Infrastructure (RPKI) on the internet in Việt Nam had also surged. By November 30 last year 54 organisations and businesses in the country had adopted RPKI technology.

The report said over the last 21 years the rapid development of internet resources and the stable and safe operation of the internet infrastructure had promoted the use of the internet and subsequently of domain names in the country.

Vũ Hoàng Liên, chairman of Việt Nam Internet Association, said the number of internet users had increased to nearly 70 million as of June 2021.

Analysts also pointed out another important reason for the sharp increase in the use of domain names: the rapid transformation from traditional businesses to e-businesses especially after the COVID-19 pandemic hit the country in early 2020.

Việt Nam’s rapid digital transformation is underway based on the three pillars of digital government, digital economy and digital society.

According to the 2021 e-Conomy SEA Report recently released by Temasek, Google and management consulting firm Bain & Company, Việt Nam’s internet economy could rise to US$220 billion in gross merchandise volume by 2030, ranking second in Southeast Asia only after Indonesia.

To fully tap the market, the VNNIC works with registries and local departments of information and telecommunications to help individuals and enterprises register .vn domain names to build brands, images, products, and services, according to its director, Nguyễn Hồng Thắng.

Domain name market

Investment and trading in internet domain names are known to be a super profitable business.

Well aware of the importance of domain names, more and more Vietnamese businesses are acquiring them.

This has opened up opportunities for individuals and firms to participate in domain name trading, sparking a new kind of business in Việt Nam.

It really took off after the Ministry of Information and Communications issued a circular in 2014 recognising the business.

Until then the domain name market was considered to be part of the nation’s information resources and the .vn was not allowed to be traded.

Since then the lucrativeness of the market has meant a number of domain name trading floors have been set up, including moigioitenmien.com, chotenmien.vn, shoptenmien.com, and santenmien.vn.

There are also thousands of domain names in every conceivable industry including fashion, healthcare, real estate, and tourism being traded online, meaning more and more people are participating in the market.

But analysts said the demand for domain names remains huge. Many Vietnamese businesses have not been aware of the importance of protecting their brands and so did not register their domain names incorporating them, and domain investors own many of them. The result is that they have to spend considerable amounts of money to buy domain names that sound similar to their brands, thus creating opportunities for domainers.

Many domainers say while the business is attractive in Việt Nam it is also not an easy business.

Trần Huỳnh Khang, a domain trader in HCMC, said the rapid increase in the number of internet users and the strong development of e-commerce have grown the market, aided by low costs of owning a domain name and simple registration procedures.

He needs only VNĐ500,000 (US$22) to acquire a domain name and a similar amount to maintain it for a year, but could end up earning thousands or even tens of thousands of dollars from selling it later, he said.

For instance Vietnam.com, TravelVietnam.com and VietnamFlights.com now cost dozens of Vietnamese billions đồng.

But domain name trading, like other businesses, has its own risks, according to Khang. Speculators should have deep pockets to retain domain names while waiting for buyers.

A major speculator in HCM City, who asked not to be named, said trading of unique and original domain names had become a trend in recent years.

“However, domain name investors should invest in [those] that are related to areas close to daily life like vehicles, healthcare, fashion, and real estate if they want to ensure liquidity and safety of their business.”

He warned that investing in many domain names simultaneously might be a “foolish business” since it would require domainers to spend a lot of money to maintain them.

“This is because it is not easy to find customers,” he added. 

Thus, people spend large sums of money to acquire domain names but do not have enough to maintain them for a long time and have to give them up.

Admittedly, Vietnamese businesses do not yet have a good understanding of the power and value of domain names and so are not willing to spend much on them.

However, analysts are confident that is set to change soon with the rapid digitisation of the country. — VnExpress News