It’s no secret to anyone in the industry that the domain name market is undergoing significant transformation. While legacy giants like .com face challenges, new gTLDs (nTLDs) and country-code TLDs (ccTLDs) are emerging as key drivers of growth.
Earlier this year, Afnic, the registry of the popular .fr domain, released an interesting report that dives deep into the different patterns of growth that 2023 saw in the domain market. Don’t have time to read the 82-page report by yourself? We have summarized its key findings so you can stay informed and prepare for what’s coming in the future.
A year of growth and recovery
After years of sluggish growth, 2023 saw the domain market grow by 3.7%—a marked improvement from the 1.4% growth in 2022. This recovery was driven by strong performances in new TLDs (+16%) and ccTLDs (+3.1%), alongside moderate stability in other legacy TLDs.
However, the broader growth masked significant shifts within each segment, with legacy domains like .com experiencing declines while other TLD segments gained momentum.
nTLDs: A new era of domain innovation
New gTLDs became the market’s rising stars in 2023. With a total stock increase of 16% and creation rates soaring by 28%, nTLDs added 5 million new domain names to the existing pool.
Generic nTLDs, such as .xyz and .icu, were major contributors to this growth, driven by their affordability and niche appeal.
Other segments of nTLDs also made waves – although some were bigger than others:
- .brand TLDs: Representing flagship corporate brands, this segment saw a 21% increase in stock and a 133% spike in new registrations, signaling a growing interest in custom domains for branding.
- Geographic TLDs: Despite a 94% increase in new registrations, geographic TLDs like .london and .berlin faced retention challenges, with renewal rates dropping from 86% in 2022 to 67% in 2023.
- Community TLDs: These domains, reserved for specific groups, suffered the most, with a sharp 59% drop in stock – a consequence of the +268% spike in their create operations in 2022.
While nTLDs gained market share, the “Penny nTLD” phenomenon (domains sold at very low prices) highlighted challenges in this segment. These TLDs accounted for 64% of nTLD registrations but often had low retention rates, reflecting high volatility.
ccTLDs: Steady growth with regional highlights
ccTLDs demonstrated resilience, growing by 3.1% and maintaining a 38% share of the global domain market.
Regional dynamics varied:
- Asia-Pacific and Africa: These regions led the way, with growth rates of 6.6% and 6.5%, respectively. Domains like .cn (China) and .za (South Africa) were key contributors.
- Europe: As home to 17 of the 30 largest ccTLDs, Europe remained a stronghold for ccTLDs. However, its market share slipped slightly to 55%, as Asia-Pacific gained ground.
- The rise of .ai: Originally tied to the island state of Anguilla, the .ai domain gained global popularity due to its association with artificial intelligence, adding hundreds of thousands of new registrations.
These trends underscore the enduring relevance of ccTLDs, particularly in regions with strong digital growth.
Legacy TLDs: A challenging year
The .com domain, once the undisputed king of the market, faced its most difficult year yet. Its stock fell by 0.7%, while its market share dropped to just 44% of the total domain market (down from 46% in 2022). The decline was driven by negative price elasticity following repeated fee increases. Meanwhile:
- .org: This TLD, aimed at the non-profit sector, bucked the trend with a 1% growth in stock, bolstered by high retention rates.
- .net and .info: These domains showed modest gains but remained overshadowed by .com’s dominance – although, as the .com price continues to rise while the stock of available .com domain names decreases, this may well change in the future.
Overall, the legacy TLD segment shrank by 1%, reflecting a gradual decline in its relevance amid competition from nTLDs and ccTLDs.
Challenges and market consolidation
The report also reflected on how the domain industry in 2023 was marked by growing consolidation among domain registries. Three companies—Identity Digital, GoDaddy, and Team Internet—managed 68% of nTLDs and 74% of nTLD domain names. Smaller operators faced difficulties in achieving financial sustainability, particularly those with fewer than 10,000 domain names.
Retention rates also declined across most segments, highlighting the importance of customer loyalty for long-term success. This volatility is driving further consolidation as operators with larger portfolios acquire smaller players to scale operations efficiently.
What’s next for the domain industry?
As the market looks ahead, AFNic believes that several trends will shape the future:
- Digital transformation: Continued global adoption of digital technologies will sustain demand for domains, especially in emerging markets.
- Blockchain and Web 3.0: The integration of blockchain-based identity systems with domain names is expected to open new opportunities and challenges.
- ICANN’s next round of new gTLDs: Scheduled for 2026, this development may spark innovation and competition in the market.
Conclusion: A dynamic, evolving landscape
The domain industry in 2023 exemplified the complexities of a market in flux. While legacy domains like .com struggled to maintain dominance, new players and regional TLDs drove diversification and growth. For domain resellers, these changes underscore the importance of staying ahead of trends and exploring opportunities in emerging domains while focusing on retention for legacy TLDs.
Are you feeling overwhelmed with keeping up with industry changes while domain prices are rising? Openprovider is committed to helping resellers navigate this evolving landscape with access to over 1,900 TLDs, transparent pricing, and expert support. With us as your registrar partner, you are well-prepared for anything that 2025 may bring your way.
