(Yicai Global) Nov. 27 -- The video market has emerged as a new battlefield for major Chinese internet companies. Xigua Video, a short video application backed by news and content aggregator Toutiao, announced that it would set up a USD300 million (CNY2 billion) fund to attract producers and encourage high-quality content creation, Sohu Technology reported.

Xigua Video will increase video creators' share of market revenue and provide them with a shopping platform, where they will be able to embed content-relevant marketing hyperlinks in short videos.

Toutiao previously acquired a series of Chinese and foreign video platforms including TopBuzz. Toutiao has become a global video brand with 21.5 million short videos, generating 10 billion hits per day.

Xigua Video had more than 200 million users as of the end of last month, generating over 3 billion views a day. It has become the largest professional user-generated content video platform in China in just 18 months, Toutiao founder Zhang Yiming said.