Why Speculating on Indonesian Domain Names Might Not Pay Off

In recent years, the domain industry has witnessed a significant transformation, particularly in Indonesia. Traditionally, speculating on .com domain names has been a profitable endeavor for many. However, the landscape is evolving rapidly, with Indonesian domain extensions like .id gaining immense popularity. As a result, those who have been stockpiling Indonesian-language .com domain names might find themselves disappointed and facing financial losses. In this article, we explore the reasons behind this shift and why the era of .com domain speculation in Indonesia may be coming to an end.

The Popularity of .id Domain Names in Indonesia The .com domain extension has long been synonymous with the internet, and it’s still widely recognized worldwide. However, in Indonesia, the emergence of the .id domain has disrupted the conventional dominance of .com. So, what’s driving this shift in preference?

1. National Identity and Trust
   The .id domain extension carries a strong sense of national identity, fostering trust among Indonesian internet users. It’s seen as a symbol of legitimacy and local presence, making it the preferred choice for businesses, organizations, and individuals seeking to establish a strong online presence in Indonesia. According to a survey by PANDI (Pengelola Nama Domain Internet Indonesia), the .id domain is the most popular domain extension in Indonesia, with 86% of respondents preferring it over other options.
2. Availability and Affordability
   Securing a desirable .com domain name has become increasingly challenging and expensive due to the vast number of domain speculators and established websites. On the other hand, .id domains are still readily available, making them a more accessible and cost-effective choice for newcomers to the online space. The average price of a .id domain is around Rp 100.000 per year, while a .com domain can cost up to Rp 200.000 or more.
3. SEO and Local Ranking
   Search engines increasingly prioritize local content, and websites with local domain extensions, like .id, tend to rank better in local search results. This SEO advantage has motivated many businesses to opt for .id domain names, aiming to enhance their visibility in the Indonesian market.
   For example, Shopee —one of the largest e-commerce platforms in Indonesia— uses shopee.co.id as its main domain name, while its competitor Tokopedia uses tokopedia.com. A quick search on Google for “belanja online” (online shopping) shows that Shopee ranks higher than Tokopedia, indicating that its .id domain might have contributed to its SEO performance.

The Risks of Speculating in Indonesian-Language .com Domains For years, domain speculators have invested in Indonesian-language .com domain names, hoping for substantial returns. However, the changing domain landscape presents several challenges for these speculators.

1. Decreased Demand
   As .id domain extensions gain traction, the demand for Indonesian-language .com domains is declining. Potential buyers are more inclined to choose a local .id domain to align with their target audience, which means that speculators might find it increasingly difficult to find buyers for their .com investments.
2. Lower Resale Value
   The resale value of Indonesian-language .com domains is likely to decrease as the market shifts toward .id domains. Speculators who hold onto these .com domains may face difficulties when attempting to sell them in the future, and they might not secure the high returns they initially anticipated.
3. Purchasing power
   Indonesia’s national per capita income in 2022 was estimated to be around 52.19 million Indonesian rupiah (IDR), equivalent to approximately 3,500 US dollars. This is significantly lower than the per capita income of developed countries such as the United States, which was estimated to be around $68,000 in 2020. Given the significant difference in per capita income between Indonesia and developed countries, it is unlikely that selling Indonesian domain names with a high price tag would be a profitable venture. The majority of Indonesians would not be able to afford such a purchase, and the market for such domains would be limited to a small number of wealthy individuals or businesses. It would be more profitable to focus on selling domain names with a broader appeal and lower price point.
4. Missed SEO Opportunities
   Websites with .com domains might miss out on the SEO benefits that come with using a local .id extension. This can impact their online visibility, making it harder to compete in the Indonesian market.

Conclusion

In Indonesia, the domain landscape is evolving, with .id domain extensions gaining dominance over .com. While speculating on .com domain names has been profitable in the past, the changing preferences of Indonesian internet users make it less appealing. Those who continue to hoard Indonesian-language .com domains may find themselves disappointed and at risk of financial losses as demand for .id domains continues to rise. As the internet continues to adapt to the local market, it’s crucial for domain speculators to stay informed and adapt their strategies accordingly to remain competitive in the ever-changing world of domain names.

Mawan A. Nugroho.
Internet practitioner since 1995s.