What's driving domain name market growth in 2021?

Dutch numbers for 2021

In May of this year, the number of .nl domain names moved quietly past the 6.2 million mark. That's up from 5.9 million since the start of 2020 and comes less than a year after we passed the milestone of six million, half a dozen years on from the five-million marker. While those figures might not be immediately eye-catching, it's worth remembering that more than 800,000 domain names a year are deleted from the .nl zone. A net annual growth of 150,000 domain names therefore requires roughly a million new registrations. That's a huge number for a nation of seventeen million people. Especially taken in conjunction with all the domain names registered in the Netherlands with other extensions, such as .com and .eu.

So, why does growth remain strong, even though there now seems to be light at the end of the pandemic tunnel? Coupled with research done elsewhere (see the links in this article), our data points to the following five factors buoying the Dutch hosting and domain name market.

1. Pandemic gave new business models a boost

Some of the new trading practices that businesses were forced to adopt have turned out to work well. Various retailers have discovered, for example, that shopping by appointment is good for customer relations and sales. And many restaurants now see takeaway services as a potentially profitable extension to their business models. Especially, it seems, if such services are based on the restaurant's own website, removing the need to pay commission to a platform such as Thuisbezorgd.nl. There's been a noticeable upturn in the quality and use of websites, and investment in good site design should pay dividends for years to come.

2. All start-ups are now internet start-ups

Research we did in summer 2020 found that all new businesses were creating an internet presence from the outset. Although online trading was often a lockdown necessity, rather than a preferred option, start-ups generally found that a website could be an excellent source of leads. That was what we heard repeatedly from the entrepreneurs we interviewed for our .nl in the spotlight articles. It's likely that businesses that start online will continue online, even when restrictions ease.

3. Local and regional focus

The switch to online trading has been particularly strong amongst businesses with a local or regional focus. In the face of restrictions, many consumers have been shopping closer to home. That trend shows up clearly in our data, because more than 92 per cent of businesses that sell locally and regionally opt for .nl. So, when those firms go online, it fuels the growth of .nl.

Figure 1: Question Q16b_1 Business use: Which domain extension would be your first choice? (local and regional businesses, source SIDN/GfK, n=577)

4. Lower seasonal cancellation peaks

Domain name cancellations normally peak twice a year, in January and in summer. Many registrants evidently review their portfolios and let unwanted names go at those times. In recent times, those seasonal peaks have been coming down. Perhaps because businesspeople are increasingly aware that unused domain names can be valuable and that cancelled names are sometimes abused.

Figure 2: Net growth, new registrations and cancellations.

5. More direct sales

Another common phenomenon has been wholesalers responding to a downturn in demand from retailers by starting their own white-label retail operations or selling via platforms. And many of them have done well, prompting trendwatchers to predict that the new models are here to stay.

Want to know more about developments in the .nl domain? Visit our statistics site stats.sidnlabs.nl, and check out CENTR.org's quarterly report for the international perspective.