Bengaluru: Helo, the social networking app by Chinese content giant Toutiao, is spending huge amounts of cash to catch up with India’s fastest-growing content startup ShareChat. Now, the question is whether local content companies can hold their own against established international rivals.

Helo has been downloaded over 10 million times, less than three months after it was launched in India. ShareChat too has a similar number of downloads. ShareChat is far more popular with users than Helo and has significantly higher user engagement levels than its Chinese rival, two people familiar with the companies’ metrics said, requesting anonymity.

And the number of app downloads isn’t the most reliable metric to track the popularity of an app—users could ignore the app after downloading it or even delete it. But it does serve as a useful indicator of how well a new app is doing.

Helo’s lightning quick expansion and Toutiao’s financial might and tech expertise indicate that ShareChat has a long and expensive battle on its hands. ShareChat has become the lodestar for content startups in India, like Flipkart was for e-commerce and Paytm for digital payments.

How ShareChat fares against Helo and other international rivals will help determine investor sentiment towards content startups.

Helo has spent more than $20 million over the past quarter in order to achieve its fast growth, the people cited above said. Helo’s spending spree will increase customer acquisition costs for rivals, too. ShareChat is not starved of capital and is in advanced talks to raise $100 million, Mint had reported.

“One thing is to see how well they (Chinese firms) are able to understand the landscape, especially in the vernacular side. That will define how well they can execute and it’s fairly difficult because most of these companies have their entire tech team based in China and the Indian team is only on the media and business side mostly," said Ujjwal Chaudhry, engagement manager, consumer internet, RedSeer Consulting. Local startups are in a better position than Chinese firms, according to Chaudhry, because they are closer to the customer and understand the vernacular space better.

ShareChat declined to comment. Helo did not respond to an email seeking comment.

In July, about a month after Toutiao, one of the world’s most valuable startups, launched Helo, the social networking app had already managed to clock over 1 million downloads. Helo, whose interface is strikingly similar to that of ShareChat, aggregates content on showbiz, parenting, daily soaps and even farming, with a focus on the vernacular space. Toutiao is operated in China by Beijing-headquartered ByteDance, which also runs TopBuzz in the US and Brazil.

ShareChat, run by Mohalla Tech Pvt. Ltd, was founded in 2015 by Indian Institute of Technology (IIT) Kanpur alumni Farid Ahsan, Ankush Sachdeva and Bhanu Singh. It was one of the first local startups to target the vernacular content market. The app had even crashed on 31 December 2016 after more than 700,000 Hindi, Telugu, Marathi, Gujarati and Malayalam speakers turned to it to wish each other a happy new year, and to look for greetings and GIFs. ShareChat has raised around $23.6 million so far from investors, including SAIF Partners, Lightspeed India Partners, Shunwei Capital, and Xiaomi.

“They (Toutiao) are deploying loads and loads of capital, and they even have the technological expertise," said Aditya Mishra, an associate at Omidyar Network, which is an investor in local news app Dailyhunt, a ShareChat and Helo competitor.

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Toutiao is said to spend millions of dollars every month across all its platforms—such as TikTok, Flipster and Helo—on advertising and marketing to increase penetration. “To compete against the deep pockets and expertise of the Chinese giants, Indian peers will need to contemplate different ways to strengthen their platforms. These could range from creating B2B (local) partnerships (government jobs could draw significant interest from the next wave of smartphone users), diversifying and going deep within India-specific content categories like Shayari or Kundali," Mishra added.

Toutiao is also an investor in Dailyhunt, which has over 50 million downloads on the Google Play Store. Clip, another competitor, also has more than 10 million downloads, while Vokal, an Indian-language question-answer platform, similar to Quora, has about 100,000 installs.

According to Mishra, the major differentiator will prove to be the number of users an app is able to retain in the long run rather than the number of installs it has. It also remains to be seen whether Beijing-based firms can understand the Indian vernacular market as well as local startups can.

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