Alibaba has invested $590m in a little-known domestic smartphone maker, the ecommerce group’s latest salvo to extend its reach into mobile internet.
The unspecified minority stake in Meizu marks the first time Alibaba has invested directly in a smartphone company, but is in line with the group’s strategy to challenge rival Tencent in mobile.
Channelling mobile users to Alibaba is a priority for the company as China switches en masse from desktop to smartphone internet — for the first time last July more Chinese accessed the internet from mobile devices than from computers.
“The investment in Meizu represents . . . an important step in our overall mobile strategy,” said Wang Jian, Alibaba’s chief technology officer, on Monday.
Alibaba is competing with Tencent for China’s mobile internet users — a race that Shenzhen-based Tencent is winning with its two flagship apps QQ mobile and WeChat.
However, fourth-quarter results by Alibaba showed that its number of mobile monthly active users nearly doubled from the same quarter the previous year to 265m.
China has 557m mobile internet users, out of a total 649m online users, according to data released last week by the China Internet Network Information Center.
Alibaba has spent about $8bn since the beginning of 2014 on acquisitions, mainly focused on developing its reach in mobile, including $1.5bn on AutoNavi, a mobile mapping software.
In June, Alibaba bought UCWeb, a mobile browser company, and the two have developed Shenme, a mobile search engine. They are also working with Quixey, a US-based company in which Alibaba has invested, to design a mobile gateway using Quixey’s app search engine.
Meizu is one of the few Chinese manufacturers to preload YunOS in its phones, while other manufacturers have been dissuaded by a spat with Google in 2012. The US group claimed that YunOS was a version of its Android operating system that was incompatible with its broader mobile ecosystem. Alibaba claims YunOS is not a version of Android.
Wang Yanhui, head of the Mobile Phone China Alliance, the industry lobbying group, said Alibaba’s strategy for rolling out its operating system has been to rely on smaller smartphone makers, of which Meizu is the largest.
“Larger companies, any manufacturers with international business, are afraid that they’ll be punished by Google. When they go outside of China they still have to play by Google’s rules,” he said.
Get alerts on Alibaba when a new story is published