(Yicai) May 24 -- Alibaba Group Holding will hone its strategy to zoom in on its users and artificial intelligence, according to leadership.

Users of Alibaba’s various platforms come first in the way the company operates business and designs products, Chairman Joe Tsai and Chief Executive Eddie Wu said in a letter to shareholders yesterday. The second strategic direction is the e-commerce giant's focus on AI as the single most powerful element that will change and accelerate business growth.

Alibaba will continue to invest in its two core businesses of e-commerce and cloud computing, accelerate business growth, and maintain its leadership in basic technologies and innovation, including AI, per the Hangzhou-based firm.

"In the past 25 years, Alibaba has grown consistently but, unfortunately, acquired “large company” characteristics," they said. So in the next 10 years, the Tmall owner will strive to rekindle a startup spirit again, defined by entrepreneurship and innovation. The mission is “to make it easy to do business anywhere.”

Alibaba will make long-term strategies, thinking in 10-year cycles, Tsai and Wu said.

Alibaba is facing stiff competition coming from e-commerce platforms such as Pinduoduo. In the first three months of this year, Alibaba’s net profit fell 96 percent to USD127 million from a year ago while revenue rose 7 percent to USD30.7 billion, according to its latest earnings report. In comparison, Pinduoduo more than tripled its net profit and doubled its revenue.

After beating analysts' revenue expectations in the first quarter, the market capitalization of Pinduoduo surged on the Nasdaq, recently surpassing that of industry veteran Alibaba, listed on the New York Stock Exchange.

In the fiscal year ended March 31, Alibaba’s net income rose modestly by 9 percent to USD 9.9 billion on an 8 percent increase in revenue to USD130.4 billion. Operating income jumped 13 percent to USD15.7 billion while adjusted earnings before interest, taxes, depreciation, and amortization tallied USD22.9 billion, up 12 percent.

Editor: Emmi Laine