Zhang Yiming is a known name in China. Originally from Fujian, a south-eastern province in China known for its people of enterprise, Yiming has created a hugely successful technology company with billions of users spending countless hours on its platforms: TikTok, Toutiao, TopBuzz and Vigo Video, to name a few.
In a recent meeting at the ByteDance headquarters in Beijing, Yiming said that India is the fastest growing market for his company. But, he wished, it was the US in an obvious reference to how thrifty the Indian market. He spoke like a true businessman, or a rather a true Fujian, seeking a better return on investment – preferred in millions of dollars if the currency is an option.
Nevertheless, with millions onboarding data services and apps in India every month, the world’s second most populous country is a priority market for ByteDance. So much so, it has designed and launched Helo, a regional entertainment content platform, specifically for India. The technology under the hood of Helo is the same as Toutiao, its wildly successful content app back home in China, but the features, user interface, and product are tailored for a random Ajit Kumar.
In less than four months of its launch, the Helo app is ranked No. 2 among the top free apps on the Google PlayStore by downloads. (Over 90% of smartphones in India run on Android, Google’s phone operating system.) Helo has over 20 million downloads since and records two million daily active users, said a person aware of Helo’s expansion plans but asked to stay anonymous. It has still some way to catch up with Sharechat, India’s top local language social app, with some 7.5 million DAUs three months ago but Helo’s performance has experts in the space sitting up and watching.
What’s more, ByteDance is spending freely its marketing dollars to acquire more users on the platform.
Helo is what you could call a China version of an originally successful platform. The original app, in this case, being Sharechat. The content on Helo is strikingly similar to what you would find on other regional content apps like Sharechat, DailyHunt, and Clip, to name a few. The difference: Helo is powered by arguably the world’s best technology algorithms in the space.
Helo is tracking the Sharechat trajectory. “The thesis behind Sharechat is ‘There is content and there is a community for that content.’ That’s why a copycat can launch and get market share,” the person quoted above said. In fact, ByteDance came very close to investing in the latest round of Sharechat funding before deciding to launch its own app.
If you are surprised why you have never heard of Helo, it’s likely because you are not its target audience. Like Sharechat, Helo targets vernacular, small town, and new data users. Most likely found on a low-end Android smartphone, Helo is powered up when the data newbies have time to kill.
Take the case of Gayatri Behere, who works as my house help in Pune. Her phone has Sharechat, Helo, Clip, and WhatsApp and she says she prefers apps like Helo and Sharechat over WhatsApp because “there’s news, jokes and funny videos of kids and old people” on the platforms. “WhatsApp is where people send long, political messages. Helo and Sharechat, on the other hand, are 100% timepass,” Behere says.
In Alwar, Rajasthan, Tejpal Singh, who drives a school pick-up van, says he was surprised by the regional content on Helo. Singh, who stumbled on the app through a Facebook ad, just last week, describes the content on the app as positive and entertaining. “There is a lot of negative content on YouTube and Facebook. Too much anti-religion content. This app shows some good posts like funny marriage jokes, job alerts, Bollywood content like old pictures of Amitabh Bachchan…”
Helo’s India plan
Helo may be only about four months old but ByteDance has had a longer run in India. It launched its short video platform Vigo Live in September 2017. ByteDance acquired Musical.ly in November last year for a $1 billion. Popular among teens, Musical.ly a video-focused social media network had around 15 million registered users in India as of February 2018.
ByteDance did not agree to interviews for this story.
But, people around the company pointed to how it had cranked up its engine tom-tomming Helo. “The company is spending anywhere between $5 million to $10 million as marketing expense in India and a majority of this expense is spent towards Helo,” said the person quoted earlier. Helo has also had the best rate of retention of users so far, this person said, but this could not be confirmed by a second source.
It’s important to note that Helo is powered by one of the best technology giants in the world, known for its speed of execution. Though the ByteDance product team is based in Beijing, it has operations being run from India in order to focus on localisation of their product.
“ByteDance is a tech giant in China but they move with the speed of a startup. It’s a combination of a big company that has resources and money and agility and speed of a startup,” said the person attributing this agility as the reason for Helo’s success.
ByteDance’s Toutiao, a content curation app that has over 120 million DAUs boasts of its users spending 74 minutes daily on the app. That’s more than average user spends on Facebook and more than twice the time they spend on Snapchat. Toutiao’s algorithms go a step beyond serving up content. During the 2016 Olympics, a Toutiao bot wrote news stories covering the event quicker than traditional media outlets and received read rates in par with these outlets.
The app uses machine and deep learning algorithms to source content that users will find most relevant. Much like Toutiao, Helo doesn’t depend on user information like demographics, age or gender to find relevant content for its users. The underlying technology learns about the users through their consumption patterns: time spent on articles, taps, swipes, pauses, comments, interaction on content posts, among other cues.
ByteDance’s algorithms have reached a level of sophistication where a user will find at least 10% of recommended posts as relevant, said Tony Li, founder of Geek2Startup, an entrepreneur community in China. Banking on this technology stack and regional content readily available across several popular platforms combined with marketing dollars, Helo has climbed the ranks. It has a team in India working to understand the nuances of the local market.
Li predicted that ByteDance has a higher chance of success in India as compared to Tencent ‘s WeChat, which has disappeared into the sunset in India after its initial success. Globalisation is the next natural step for Toutiao after its China success. He points to the strong run TikTok has had in US. Key will be meeting the regional content demand here, added Li.
Google and KPMG in a report in March 2017 predict that the market of local language internet users in India will grow to 536 million by 2021, leaving English content users (199 million by then) far behind. Rural Indian language internet users already have higher engagement spending 328 minutes a week on chat apps, social media, online entertainment, and news, as against 308 minutes spent by urban users.
Helo is not available in English. It is available in 14 regional languages and dialects: Hindi, Marathi, Gujarati, Bhojpuri, Hariyanvi, Rajasthani, Odia, Punjabi, Tamil, Telugu, Malayalam, Kannada, Bengali, and Assamese. Its feed, a mix of jokes, memes, funny GIFs and videos, Shayari, click-baity film gossip, comes from various other platforms.
“The platform crawls and sources content from Sharechat, Instagram, DailyHunt, Clip among other platforms,” the person quoted earlier said. The company also has its own content team that sources vernacular content based on the local understanding of the market.
“(ByteDance) is spending rapidly on acquiring users in India in a space that has already been established by competitors such as Sharechat that have proven the potential of regional content apps,” said Satish Meena of Forrester Research. Meena said that the Helo’s target users are mainly in Tier 2 and 3 towns and are roped in through ads on YouTube and Facebook. A lot of these are likely to be paid installs, added Meena, where the company hires a marketing agency to drive targeted installs.
As a product specifically tailored for rural Indians or new internet users, the Helo app is fairly simple to navigate through. It doesn’t ask to sign up or log-in when a new user first lands up on the app.
If you look at Sharechat and Helo, the app designs are very similar to TikTok where the landing page of the app is always “trending” content, noted Akash Senpaty, a product manager at Zynga and an expert at taking apart apps. Helo has also borrowed features from Twitter where a user can add comment on a post being shared. Senpaty said that even though these features can probably increase virality of posts, Helo has to compete with closed WhatsApp groups. Users are generally part of WhatsApp groups with similar interests and content relevant to those interests. What Toutiao – or Helo – is supposed to do by the tuning algorithms to a high fidelity, WhatsApp groups do with crowdsourced human intelligence with far more stickiness, Senapaty pointed out.
Apart from GIFs and videos, the app also tags timely and trending news content – for instance, the ongoing #metoo movement in India, live cricket updates, and political developments.
Like Twitter, there are trending hashtags on the app that indicate politically inclined content: for example, content tagged with #OurModiDelivers or #BJPLayiBerojgari. The platform also has verified and official accounts of users.
Vernacular content: Undifferentiated!
The two years since the launch of Reliance Jio’s 4G network services has been nothing short of a data revolution in India. The millions of Indian users – new and old – on the mobile internet today also opened up a whitespace between messengers such as WhatsApp and social media apps like Facebook. Toutiao also launched in China in 2012 when smartphone penetration dramatically increased in the country and new internet users were looking for something to do on their smartphones.
Offering users a continuous stream of an entertainment feed, Toutiao found initial success among smaller cities and towns in China where the company could advertise cheaply. In its first year, the company acquired its first million users by spending only 1 million RMB ($160,000) in promotions. Most of Toutiao’s users – about 72% – are located in China’s bottom-tier cities. The same holds true for Helo’s audience in India, except that Sharechat has the first mover advantage here.
Sharechat founded in 2015 as a chatbot used by a few thousand users has grown to a well-funded company clocking 7.5 million DAUs as of July this year. Sharechat steadily built momentum by building a platform that curated regional content.
“The Chinese are still in hyper-growth mode, by scraping content from here and there to show a semblance of activity,” said Himanshu Gupta, a former WeChat executive. WeChat, China’s superapp by Tencent, has been in a tussle with ByteDance due to the latter’s increasing dominance in China’s social media and online entertainment industry.
“To get a content-based platform play right you need creators to generate content, curation and moderation of content, and consumers to view content on such social platform,” Gupta said. “Chinese are skipping the first two steps by scraping content and putting them via bots and focusing on the third part.”
The first person quoted in this story also confirmed this about ByteDance’s execution style. The content business is a combination of three parts: the creation of content on the app, the ability to distribute and deliver relevant content to users using algorithms, and promoting the app, this person said.
Thanks to ByteDance’s phenomenal success in China backed by the power of its algorithms, Helo has the advantage of getting at least two of those three things right. It has the money to acquire users in India market and it has a tech stack that has helped it achieve a feat of having an average user spend 72 minutes a day on the Toutiao app.
(The cost of acquiring users in content app business can be as low as Rs 3 a user. Read our story on China’s NewsDog gamifying its way to the top: https://archive.factordaily.com/newsdog-the-app-that-gamified-its-way-to-the-top-in-india/)
Still, differentiation is a casualty. “At present, there’s a lot of overlap in terms of content on Helo, Sharechat and other user-generated content apps. There is no major differentiation as such,” said a rival startup founder, who asked to stay anonymous. “In the long run, it is important for these platforms to be able to monetise these users, which will be challenging given that there isn’t much stickiness based on the core propositions of these apps.”
Also, in the months or quarters ahead, Helo’s parent will face pressures of a different kind: ByteDance that generated a revenue of $2.5 billion in 2017 is gearing up for an initial public offering, pointed out the first person quoted in this story without a name. An IPO will mean pressure to shore up profits and cut down on spending. So, even if Helo manages to outnumber Sharechat and secure the top spot in regional content in India, monetisation and returns here will be closely watched by hawkish investors. If Zhang Yiming can sell them the India growth story, he might turn out to be smarter and better in the long run.
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Updated at 08:36 am on October 23, 2018 To add a missing hyperlink for NewsDog story
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