Alibaba Invests $590m In Meizu as it Expands to Smartphones

We have known Alibaba as a ginormous online retailer to date. Its thirst for business activity doesn’t seem to have been quenched as it ventures into the world of smartphones. That’s right; Alibaba Group Holding Ltd. is spreading its wings in the business of smartphones courtesy of a fresh investment worth of $590 million in Chinese smartphone startup, Meizu Technology Co.

The two entities jointly announced their alliance, pledging mutual support in the process. As per this alliance, Meizu is to provide assistance on market strategy, smartphone operating systems and off-line sales to its undisclosed minority shareholder. Alibaba will reciprocate the favor with support in shape of payment service, mobile internet, data analysis and e-commerce.

The news is significant because Alibaba is by far the most significant e-commerce player in the market and any expansion plans stretch far beyond China

It’s worth noting that Alibaba’s business unit ‘Aliyun’ has had testing times with its Android-based Yun OS for smart Tvs and smartphones. This new association with Meizu is expected to bear fruit that hasn’t been a possibility for Alibaba on its own. There is certainly no doubt that this will be quite a challenging task given the presence of giants like Apple, Samsung, Lenovo and the popular Chinese rival, Xiaomi.

The expansion of Alibaba and Xiaomi makes for an interesting comparison. While the former has ventured into the smartphone business, the latter is making inroads in e-commerce. It’s as if Alibaba is working its way back only to reach out to customers much more directly courtesy of channels such as smartphones.

The silver lining here is that Meizu is still hot on the heels of a grand feat it recently achieved with sales of over 1.5 million smartphones last month. Huang Zhang, the founder of Meizu, was delighted to announce that this is an increment of 50% of the sales that the company achieved in December, last year. Alibaba would seriously hope that it can carry this confidence into this freshly announced partnership.

  • Bilal Iqbal

    Aik or….:p

  • After Xiaomi bashed it upfront, it had to put in its investments somewhere to enter this niche too :P