Alibaba Group reported better-than-expected earnings in its fiscal third quarter, signaling renewed momentum amid growing domestic competition and a slowing Chinese economy. The Hangzhou-based tech giant posted a net profit of 48.95 billion yuan ($6.72 billion), a sharp increase from 14.43 billion yuan a year earlier, exceeding analyst expectations of 36.26 billion yuan.

Revenue also grew 7.6% year-over-year to 280.15 billion yuan, surpassing forecasts of 279.03 billion yuan. Alibaba’s “user first, AI-driven” strategy played a key role in this growth, according to CEO Eddie Wu, who emphasized the company’s focus on e-commerce and cloud computing investments to drive long-term success.

Despite challenges from ByteDance’s Douyin and Pinduoduo (PDD), Alibaba has been leveraging AI technology to enhance its platform. Its AI-powered marketing tool, Quanzhantui, has been a crucial part of monetizing its e-commerce business and improving engagement with merchants.

With AI innovation and strategic expansion in cloud computing, Alibaba aims to maintain its competitive edge and navigate economic headwinds, positioning itself for sustained growth in the evolving Chinese market.