Chinese e-commerce giant Alibaba has invested $590 million for a part of domestic smartphone manufacturer Meizu. The unspecified stake gives the internet giant a foothold in hardware for its smartphone operating system YunOS — best known previously as an iOS-clone — but the company faces serious competition from domestic and international rivals trying to tap the country's growing number of mobile internet users.

Although internet penetration is still under 50 percent in China, the country already has 649 million web users — 86 percent of whom are logging on with smartphones and tablets. Chinese internet giants like search company Baidu and gaming-and-chat firm Tencent have already made the move to mobile, while a clutch of domestic smartphone manufacturers including Lenovo, Huawei, and Xiaomi are battling it out with multinational companies like Samsung and Apple to sell the actual hardware. Together, these five brands account for 60 percent of China’s smartphone market.

Whatever the case may be, Chinese mobile users can expect to see more of YunOS in the near future. Alibaba, meanwhile, has more immediate problems to deal with. Although the company says that mobile sales accounted for 42 percent of its business last quarter, its mobile ad revenue was less than 2 percent — below analysts' estimates. The company can fight for all the mobile users it likes, but market share won't matter until customers start paying out.