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It seems Alibaba is planning to expand its operations and enter the smartphone industry.
The Alibaba Group Holding Limited will now be pursuing new market ideas. This idea will be in the form of a $590 million investment. Alibaba and Meizu Technology Corporation Limited have announced today that Alibaba Group will be investing US$590 million for a minority stake in Meizu which is one of China’s leading smartphone manufacturers.
So this basically means that now Alibaba will also be entering the smartphone market along with its other ventures. Moreover this investment deal is going to be subject to customary closing conditions. Due to the investment deal the Alibaba Group and Meizu will now collaborate at both strategic and business levels in order to achieve a deeper integration of Meizu’s hardware and Alibaba Group’s mobile operating system.
From now on Alibaba Group will provide Meizu with resources and support in the fields of e-commerce, mobile operating system, data analysis and mobile internet. This will be done in order to develop Meizu’s smartphone ecosystem further.
Moreover the online shopping marketplaces of Alibaba Group will now become distribution channels for Meizu’s smartphones and other devices. Jian WANG the Chief Technology Officer of Alibaba Group stated that the investment in Meizu represents a significant expansion of the Alibaba Group ecosystem and the investment is also a vital step in the company’s overall mobile strategy.
This he explained is because the company wants to bring users a wide array of mobile offerings and experiences. The Chief Executive Officer of Meizu, Yongxiang BAI also commented about this new investment deal. He said that this strategic partnership with Alibaba Group will ensure Meizu to further develop its smartphone business and its smart devices ecosystem. He seemed pretty happy with this new investment deal his company has struck with Alibaba.
Meizu is one of China’s leading smartphone manufacturers which is renowned for its technology and sophisticated product design and even features that satisfy the needs and requirements of the consumers.
Over the years the Chinese smartphone market has experienced fast growth with local brands gaining an increasing market share and that is why local brands now see a chance of expanding their operations.
Last year China had more than a billion mobile phone users and about 40 percent of them used smartphones. However competition from internationally recognized and renowned brands is still very tough such as Samsung and Apple but the local Chinese brands basically have a price advantage which makes them able to compete in the market.
Alibaba Group was founded in 1999 and it provides the fundamental technology infrastructure and marketing reach to help businesses take advantage of the power of the Internet to establish an online presence and conduct commerce with hundreds of millions of consumers and other businesses. The company’s mission is to make it easy to do business anywhere in the world. Now let’s see whether this new investment decision by Alibaba comes out to be successful.
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