New Delhi/Bengaluru: China’s Toutiao, one of the world’s most valuable start-ups, has launched a social networking app called Helo to take on the country’s hottest digital media start-ups such as Dailyhunt, ShareChat and Clip as well as Facebook.

Helo, which aggregates content on parenting, showbiz, daily soaps and even farming, has already racked up more than 1 million downloads since its launch last month. Helo’s interface is strikingly similar to that of ShareChat, the content and social networking app that has become an investor’s darling.

The launch of Helo marks a significant departure from the way most Chinese internet giants have operated in India so far. The likes of Alibaba Group, Tencent Holdings and Meituan-Dianping have picked up stakes in Indian companies rather than launching their own operations here.

Helo was launched by Toutiao after it considered investing in start-ups it is now competing with. Earlier this year, the Chinese company held talks to invest in both ShareChat and short-video platform Clip, but neither discussion led to a deal, two people familiar with the matter said. Toutiao is also a minority shareholder in news app Dailyhunt, with which it will now compete.

Toutiao did not respond to a request for comment. ShareChat declined to comment whereas Clip did not respond to an email and messages seeking response.

Founded by Zhang Yiming, a 35-year-old software engineer, Toutiao, which means “Today’s Headlines", has been one of the biggest success stories of China’s start-up ecosystem. Toutiao, owned by Bytedance, is considering a public listing of its shares that may value the company at more than $45 billion, according to a Wall Street Journal report earlier this month.

Toutiao is a news aggregation app that offers personalized news and entertainment content to hundreds of millions of users in China. A key factor behind its success is sophisticated machine learning algorithms that allow the company to serve personalized content to users although some critics say much of the content on its app is “clickbait".

Last year, Beijing-based Toutiao bought a bunch of content platforms for mobile users including Flipagram and Musical.ly in the US.

Toutiao’s meteoric rise—it was started in 2012—has inspired a bunch of new content start-ups including Clip and NewsDog. If its record is anything to go by, Toutiao’s new product Helo will test the ability of ShareChat, the country’s fastest-growing content firm.ShareChat is close to raising $80-100 million mostly from existing investors led by Xiaomi and Shunwei Capital, a person familiar with the matter said.

The Times of India reported about ShareChat’s proposed funding round in June. That round reflects the boom in funding for content start-ups. In May, NewsDog raised $50 million from Tencent and others. Apart from ShareChat, both Dailyhunt and Clip are in the market to raise fresh funds.

Toutiao, which means “Today’s Headlines, is one of the biggest success stories of China’s start-up ecosystem-

While Indian start-ups such as Dailyhunt, ShareChat, Clip and Pratilipi are expanding fast, the content business is dominated by Chinese firms. Two of the three largest news and entertainment apps, NewsDog and UC News, are Chinese.

Most of these platforms offer a large amount of local language content and their apps are designed to cater to the sensibilities of people who don’t speak English. They are also content aggregators and don’t generate original content in most cases.

India has 234 million Indian language internet users compared to only 175 million English users, according to a 2016 joint report by Google and KPMG.

By 2021, the gap between the two categories will widen, with Indian language users comprising 75% of the internet base, says the report.

“Chinese players have an advantage of better technology talent available, especially in machine learning and AI," said Ujjwal Chaudhry, engagement manager, consumer internet, at RedSeer Consulting.

“(This) might very well become the differentiator in the long run since it is fairly complex to create algorithms within the context of vernacular languages. What remains to be seen is how well they are able to understand the Indian mindset and adapt accordingly."

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