Wu Maoqing, a 32-year-old banker in Beijing, lost so much money in China’s stock markets last summer that he describes himself as “scarred” by the experience. But in October, he discovered a new asset class he hopes will help make the money back—short domain names. Since then, Wu has invested over 200,000 yuan ($30,769) to buy domains like gcmw.cn that he’s hoping to sell for twice what he paid.

Thanks to an e-commerce boom in China, thousands of investors like Wu are rushing to snap up “short” domain names, ones with five or less letters or numbers, and pushing up the value of domain names around the world in the process.



Chinese buyers accounted for nearly 75% of all global short domain name purchases in 2015, according to the latest 2015 Year-to-Date Top 100 Sales Chart provided by DNJournal and WHOIS data provided by DomainIQ (paywall), and 48% of the top 100 sales.

This data may even underestimate their involvement, as many high-end domain name sales are never reported publicly, or involve private buyers. For example, the most expensive domain name sale this year, porno.com, involved a private buyer—one who the purchase price of $8,888,888 indicates was probably Chinese (eight is a favorite number in Chinese culture because it represents “making a fortune” ).

“China has become the largest buyer of short dot-com domain names, without a doubt,” Alan Dunn, the managing director of NameCorp, a Delray Beach, Florida-based digital naming agency, told Quartz via email. And Chinese buyers are amassing a growing percentage of the global internet’s short domain names, other experts say:

Speculative market

Most Chinese buyers, like Wu, aren’t snapping these up to start their own online companies, they’re buying them hoping to sell in a few months or years for a higher price.

A recent auction in Shenzhen showed how hot names are right now. On Dec. 19th’s “Domain Day of China,” the first-ever Chinese Domain Festival and China Digital Asset Investment Summit, a crowd of over 200 Chinese investors spent 154.49 million yuan ($24.1 million) (link in Chinese) to snap up domain names like house.com.



An entire cottage industry of brokers, auction houses, and domain name valuation websites has sprung up to cater to these investors that controls the industry. “Most large deals are done via agencies,” said Chen Xuedan, the chairman of 190.com, a digital asset company that co-sponsored the Shenzhen auction.

Some Chinese investors have found that short holding times can yield big profits.

Zhang Ming, the founder of Mimayi, a startup that registers domain names, told Quartz that he purchased the domain name guzhiwei.com with a bid of 340 yuan ($53) in 2012, inspired by a famous Chinese chain restaurant also called Guzhiwei. Half a year later, a company approached him to buy the domain name for 22,000 yuan ($3,437). Zhang sold two names he owned, hrk.com.cn and xhr.com.cn in 2013, for five-digit yuan sums, after buying them for four-digit sums, he said.



Chinese buyers are choosy



As anyone who remembers the US tech bubble of the 1990s can tell you, domain name investing has existed for years. “Even before the influx of Chinese investment, there was an established wholesale market for buying and selling domain names,” Dunn said.

But these new Chinese buyers have very specific appetites for domain names, Mimayi’s Zhang explained, with a preference for initial consonants and short, numeric names.



Two-, three-, and four-number domain names that do not include a “0” or “4” are the most popular, he said, “because ‘0’ looks like ‘O’, because zero looks like the English letter O and might be confusing, and ‘four’ in Chinese pronunciation sounds like ‘death.’ ” The number eight is especially popular for gambling websites, because of its association with making money.



As for English-sounding web names, most of the alphabet, except vowels and the letter “v,” are popular, and short is best. Jingdong, a famous Chinese e-commerce platform, changed its domain name from 360buy.com to JD.com (JD is short for Jingdong in Chinese Pinyin spelling).

As Chinese investors and the agencies that cater to them have rushed into the market, finding good names has become more difficult, Dunn said. “Many domains listed on one venue may never show up on others,” he said, and some domain names are only available to subscribers or customers of brokerage houses.

Looking for the big payout

As e-commerce booms in China, companies are paying millions to buy the right domain name—and some investors are hitting the jackpot. Earlier this year, Qihoo 360, an internet security company, spent 110 million yuan ($17 million) to purchase “360.com,” by far the highest price paid for a domain name in China this year.



Within the past four years, there have been several other multi-million dollar deals in China:



Is a bubble forming?



After pouring money into real estate, stocks, and a host of less orthodox investments, there are warning signs that Chinese investors jump into domain names may be causing another bubble.

First of all, the number of registered names is growing incredibly fast. At the recent “2nd World Internet Conference“ held in Wuzhen, China, the China Internet Network Information Center (CNNIC) reported that the registered numbers of .CN (link in Chinese) domain names has hit 12.25 million, a year-on-year growth of 200%.



And because the domain name market is not regulated by any official government, there’s no oversight whatsoever. “For most domain names the only key regulation is that you must provide accurate WHOIS information and verify an email address,” Dunn told Quartz. Regulators aren’t paying attention because domain name investment is “still only a small fraction of the financial ecosystem,” he said.



The purchase of domain names is not public, which means many are high-end sales are done without open records of the purchase prices, and handled in private auctions or even over messaging service Wechat. Over the last year, “great domains like HongKong.com, Taiwan.com, DD.com and others” have changed hands, Dunn point out, but no one knows the details of the sales.

Investors in the industry have to rely on agents and brokers instead for information, who are making money off of domain name sales and are incentivized to make the market look at lucrative as possible.

Zhang, Dunn, and others in the business compare domain names to antiques, because they are one of a kind assets that can’t be reproduced. But to sell them at a profit, someone else has to want them. As a domain investor himself, Zhang said he lost thousands of yuan early on, because no one wanted to buy the names he had.

Whether the market is a bubble is “certainly a fair question,” Dunn said. “Very few assets ever have a chart that just shows an upward motion.”