The GMO Registry CEO envisions new “global home of ecommerce”
Question: What does it take to win your very own domain extension?
If you’re GMO Registry, it takes about nine hours, and $41.5 million.
That’s how much GMO bid to win the rights to the highly-contested .SHOP domain extension — beating out big-name competitors like Amazon.com and Google in the process.
Hundreds of other relevant new domain extensions have launched in the last couple of years, giving consumers unprecedented choice for finding a catchy, useful domain name. But few have generated as much anticipation — or as much competition — as .SHOP.
GMO’s winning bid was back in January 2016. Now, not even a year later, .SHOP domains are on the cusp of public launch on September 21st, and are now available to pre-order for either launch day or during the Early Access Period preceding launch.
GMO Registry CEO Hiro Tsukahara sat down with us to reflect on GMO’s past year, their headline-making bid for .SHOP, and their plans to establish .SHOP domain names as the web’s most trusted destination for online shopping.
On winning the auction (and beating Google and Amazon
Before GMO could make any plans for growing their new .SHOP domain extension, they first had to win the rights to it at an ICANN-held public auction.
“It was difficult to know what to expect going into the auction,” Tsukahara confessed. “There were seven applicants in the race so it was a very diverse field.”
And how does it feel when that field is stacked with heavy-hitters like Google and Amazon? Actually, it’s a funny story. As Tsukahara explained, bidders in ICANN’s public auctions are not told who their competitors are — just how many they’ll be up against. So even GMO Registry can’t say for sure, but even then they were aware of the stakes.
“Of course we knew that we were up against some big players,” Tsukahara clarified. “But we also knew that everyone would be going in with a budget commensurate to what they believed .shop to be worth.”
All GMO had to do was prove their commitment to the belief on auction day. The auction’s timing placed GMO began the auction at a geographical disadvantage by commencing at 4 PM UTC. If you’re in New York that’s at 12 PM. In Los Angeles, 9 AM. But being based in Tokyo, GMO Registry had to be prepared at 1 AM.
But prepared they were, cans of Red Bull presumably at the ready, for a grueling bidding war between .SHOP’s seven applicants that would stretch well into the next day.
“Of course we knew that we were up against some big players, but we also knew that everyone would be going in with a budget commensurate to what they believed .shop to be worth.”
One by one the competing applicants withdrew, narrowing the race to a single other competitor. Finally, after a harrowing three-hour showdown, GMO Registry sealed their victory of the .SHOP domain extension.
“We believe very strongly in the potential of .SHOP, and that is what defined our bidding strategy,” Tsukahara explained.
The winning bid established .SHOP the most expensive new gTLD to date (though the .WEB extension broke the record in July of the same year). How did it feel to emerge victorious?
“I would have to say that we are satisfied with the winning bid,” said Tsukuhara. “Even more so now that we have seen the results of the .WEB auction.”
Why .SHOP domain names matter
GMO Registry’s winning bid might have surprised domain industry speculators, but the decision to target .SHOP goes to the foundations of the company itself. “GMO Registry was established with the objective of acquiring .shop,” Tsukahara said.
As a member of GMO Internet Group, GMO Registry’s parent company had a long history in both the domain name and ecommerce industries.
“Based on our industry experience, we saw a clear opportunity for a domain that was dedicated to the ecommerce sector,” Tsukahara said. “The global ecommerce market has grown over 20% year-over-year for the past 5 years and continues to expand, yet in most countries ecommerce penetration is still in the single digits.”
“We saw a clear opportunity for a domain that was dedicated to the ecommerce sector.”
In light of these promising trends, GMO registry believes the timing is right for a dedicated domain extension like .SHOP to grow alongside the ecommerce industry, and in turn, to drive growth within that industry. But Tsukahara also asserted that .SHOP’s applications also go beyond ecommerce, into commercial arenas big and small:
“The potential market (for .SHOP domain names) includes other online businesses, including digital content and ecommerce solutions providers, as well as the growing B2B ecommerce market.”
He added that .SHOP also benefits “offline shops,” like “small businesses not ready to move into ecommerce, but want to be able to communicate with their customers online, or even offline services, such as a nail salon or dry cleaning service. We plan to appeal to all of these markets.”
Thanks to numerous factors, GMO Registry deems .SHOP to have instant appeal that will drive it to wide-spread adoption in the long term.
The advantages of a .SHOP domain name
“T”he word ‘shop’ is both recognized and understood in many languages and cultures around the world,” said Tsukuhara. “I believe that this universal recognition gives .shop the potential to truly become the global home of ecommerce.”
Since the term “shop” is so widely known, domains with the .SHOP extension can ensure a single name remains clear and relevant anywhere in the global market. “(.SHOP) would be a great online address for any ecommerce business operating in multiple geographies,” added Tsukuhara.
As both a noun and a verb, .SHOP works equally well as a business identifier (as in, “Mom and Pop’s Shop”) or as a call to action (as in, “It’s time to shop!”).
That makes it adaptable for a variety of commercial needs, from a website’s primary web address to a specialized URL that Tsukahara said “could also be used for promotions, such as a summer sale or other special event.”
As ecommerce continues to grow, and more retailers show interest in carving out their own ecommerce channels, business are going to need options for catchy, relevant domain names.
Under crowded extensions like .COM, these kinds of short, striking, highly-brandable domain names are likely to be scarce. However, the specialized nature of .SHOP domains, along with their very recent debut, means that businesses will more likely find a .SHOP domain that provides a competitive advantage in marketing and branding right from the start.
What does the future hold for .SHOP?
“We hope to contribute to the success of both online and offline businesses that choose a .SHOP domain name.”
In the next decade, Tsukahara envisions .SHOP becoming synonymous with shopping, a recognizable and trustworthy namespace that consumers can depend on as easily as their nearest real-world shopping destinations.
“Just as we associate addresses like Rodeo Drive in LA or the Avenue des Champs Elysées in Paris that we instantly associate with shopping, we are aiming for .SHOP become the ultimate destination to shop online,” he said.
But in addition to aiding online shoppers, Tsukahara expressed intent for GMO be an ally domain registrants as well. “We hope to contribute to the success of both online and offline businesses that choose a .SHOP domain name,” Tsukahara said. He also affirmed that GMO Registry aims to “support and encourage innovation and development in ecommerce.”
For now, GMO Registry seems far more focused on the present, and laying the groundwork they need to realize their future aspirations. With a long-awaited public launch right around the corner (as of this posting, September 26th is just 13 days away), the registry is on the cusp of another interesting and exciting year — one that Tsukahara hopes to conclude with one million .SHOP domain names registered.
We’ve received a record-breaking number of .SHOP domain pre-orders to date and launch day is fast approaching. Claim your spot in line by pre-ordering your desired .SHOP domain. Or learn how to take advantage of Early Access and register before launch day.