Alibaba moves into smartphone market with £400m investment

 
Joe Hall
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Alibaba founder Jack Ma is filmed on an iPhone. (Source: Getty)
Chinese e-commerce giant Alibaba has bought a $590m (£388m) minority stake in Chinese smartphone maker Meizu.
The move signals Alibaba’s first major foray into smartphone hardware as it looks to build a platform for its YunOS mobile operating system.
In a joint statement, the two companies said they will collaborate “to achieve a deeper integration of Meizu’s hardware and Alibaba Group’s mobile operating system”. The Guangdong-based Meizu will be granted access to Alibaba’s sales channels, data analysis and other resources as part of the deal.
Alibaba’s chief technology officer Wang Jian commented:
The investment in Meizu represents a significant expansion of the Alibaba Group ecosystem and an important step in our overall mobile strategy as we strive to bring users a wider array of mobile offerings and experiences.
Since its record-breaking IPO on the New York Stock Exchange last year, Alibaba has looked to diversify its business.
The e-commerce firm made a $500m investment in India’s One97 Communications (which owns India’s primary mobile payment platform), has been a part of a $600m financing round for domestic taxi app Kuaidi Dache and has bought a controlling stake in marketing firm AdChina.

Alibaba and Meizu will face intense competition in the Chinese smartphone market from domestic frontrunners Xiaomi, Huawei and Lenovo Group as well as larger multinational firms such as Apple and Samsung.
Its domestic rivals all have at least a five per cent market share of China’s massive smartphone market, while Meizu recorded less than two per cent market share.
The smartphone maker previously collaborated with Alibaba on its Flyme phone last year.

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