Tencent Corp, a Chinese internet giant, is relentlessly looking for investment opportunities abroad especially in the news sector, as its Tencent News app lags far behind a major rival, Jinri Toutiao (meaning Today’s Headlines), in home market.
In the past April, Chinese mobile users spent a cumulative 3,895 hours on Toutiao app, whereas the number for Tencent News is a mere 2,302 hours, according to a Chinese investment bank CICC research citing data from mobile intelligence service Questmobile.
The Indian opportunity
With an online population of 470 million and a ready pool of mobile users readied by the likes of Xiaomi and other low-end smartphones, India is ripe for booming growth in the content business.
NewsDog, a Hong Kong-based news and entertainment content aggregator startup, took advantage of the situation. It just sealed one of the biggest start-up deal in the news and entertainment space yesterday, raising up to $50 million in a Tencent Corp led, Series C funding round and also successfully raised another $35-40 million from Tencent and other start-up investors back in February.
The other investors include venture capital funds, Danhua Capital, Legend Capital and China-based mobile app publisher and developer, DotC United Group.
While NewsDog is ranked No 1 news app in India on Google Play, boasting of over 50 million aggregate users, it is but only one of the many Chinese companies trying to seize the hot India sector.
Currently, NewsDog is one of India’s top three news and entertainment apps. Chinese news app Toutiao-backed Dailyhunt and Alibaba-backed UC News are the other two top players. Toutiao who recently acquired another news aggregator, News Republic is looking to replicate its success in China to compete further in India’s content business sector.
In the face of fierce competition, NewsDog expanded its platform by making it available on other Asian internet platforms such as Xender, UC Browser and MX Player, which are compatible with low-cost smartphones for Indians in smaller cities, to differentiate itself from the pack.
The influx of fresh funds could be timely as well for NewsDog to add more regional languages to the current 10, and strengthen its technical capabilities to constantly provide users with more personalized and dynamic content to enrich the Indian locals’ user experience.
Despite the overwhelming quick success of these start-ups at raising funds and acquiring India’s content business market share, doubts have been cast at the ability to generate ad revenues. Furthermore, news within the content business is known as the least lucrative, fueling speculations that the recent funds raised might be relatively overvalued.
While densely populated India presents new opportunities, with a huge potential for growth for these Chinese start-ups in theory, with mounting competitions in India’s content business and clearly global dominating players – Youtube, Google and Facebook Inc, the route to generate ads revenue to become profitable could be long and arduous.