Will .nl pass the six million marker?
Business websites driving growth
A decade or so back, we were celebrating one milestone after another here at SIDN: two million .nl domain names, then three million, then four. However, it's now seven years since we last passed a million marker. Growth has slowed in recent years, but we did recently reach 5.9 million, prompting the question: is the .nl domain on course for six million names?
Brands and domain names: the Coolblue case
Good prospects for the internet economy in 2019
Pessimism born of economic crisis
To be honest, back in 2012, I couldn't see us ever getting to six million. At that time, the global economic crisis was at its peak, and growth of our national domain had levelled off. People were saying that Facebook and apps would make websites redundant. And the mood wasn't helped by the Dutch football team crashing out of the European championships. On top of that, market penetration was already higher in the Netherlands (49%) than almost anywhere else. But the crisis eventually passed and the outlook began to change.
Healthy e-commerce climate
The main reason for .nl doing so well is the e-commerce climate in the Netherlands. Conditions are highly conducive to growth. A very wide variety of Dutch enterprises do business on line. Including firms in sectors that you wouldn't necessarily associate with e-commerce. In most other European countries, businesses tend to start without an internet presence, whereas most Dutch start-ups go for a website straightaway.
Record number of new businesses
Another significant factor is that the number of businesses keeps growing. While the crisis gave us the phenomenon of 'forced start-ups', we now see many people choosing to try a business venture. The number of start-ups is increasing year-on-year. The Chamber of Commerce recently reported that 2019 is already a record year, with more than 160,000 new enterprises. The popularity of going into business probably explains why Facebook and apps have had little negative impact on demand for websites and domain names. Social media may have more or less stifled demand for personal websites, but that has been more than offset by growing demand from the business community.
Demand has shifted to the business sector
Anticipated business use is now the most common reason for registering a domain name cited by private registrants aged twenty to forty, the age group responsible for most private registrations. Demand from legal entities accounts for 60 per cent of the total, and obviously almost all the registrations in question are for business use. So a grand total of 85 per cent of all registrations are for business. In the Netherlands, it's very rare for an enterprise to see social media as an alternative to having a website. Again, that's in contrast to the situation elsewhere.
Strength of the registrar community
The Dutch registrar community has also been very influential in relation to the growth of .nl. In recent years, the 1,200 .nl registrars and their resellers have managed to keep extending the lifecycle of the average domain name. As a percentage of the total number of domain names in the zone, cancellations have consistently fallen. That owes much to the quality of the .nl domain name portfolio. Compared with other extensions, a high proportion of .nl domain names are actively used for e-mail and websites. That goes a long way to explaining why .nl's share of all Dutch websites (77 per cent) is considerably bigger than its share of the domain name market (64 per cent).
Brand .nl
Finally, our steady progress towards the six million marker says a lot about the strength of the .nl brand. Since 2012, hundreds of new TLDs have been created, but none have taken a significant share of the market. And some established TLDs, such as .eu, have lost ground. Yet .nl has continued to grow. Mainly because consumers and businesses have more confidence in .nl than in other domains. That's why, when a domain name is registered, .nl is usually the first choice. Even when the registrant's preferred domain name is already taken.
Looking ahead
So, what of the future? The six-million marker is now within sight. And, while the economy does face threats (Brexit anyone?), the trend towards online business appears very firmly established. So it seems just a matter of time until the milestone ahead is passed. Nevertheless, it remains to be seen how other market trends will dictate the pace of future registrations. Small webshops are increasingly opting to use retail platforms rather than maintain independent storefronts. Meanwhile, big e-commerce players such as Coolblue are cutting back on the number of distinct brands they use. Growth of the .nl domain is currently five to ten thousand per month. At the present rate, it will therefore be more than a year before we have six million domain names. And the world can change a lot in a year.
