Alibaba has recently invested in Meizu. The company is comparable to Xiaomi, in that both brands build competitive advantages via the integration of hardware and software. Alibaba Group owns some of China?s top-ranked mobile apps across map services, payment, mobile search, mobile browser, video, etc. The strong portfolio complements Meizu?s hardware strategy and will support competitive user experience.
Management reiterates the strategy to broaden the consumption categories of younger users. Consumers in lower tier cities,
despite their lower disposable income, tend to spend a greater proportion of their income online since the physical infrastructure is poor. Focus of category expansion includes online-to-offline and healthcare products.
Through Aliexpress, Alibaba is tapping into the expanding consumer markets in Brazil and Russia. International growth, however, will take time, as Alibaba also needs to work with their governments to balance imports/exports for healthy current accounts. Management did not rule out acquisition strategies to help with cross-border expansion.
