(Yicai) March 1 -- Alibaba Cloud Intelligence Group, the Chinese internet giant’s cloud computing arm, announced its steepest price cuts to date as competition for clients escalates.

The prices of over 100 products will be reduced by an average of more than 20 percent and by as much as 55 percent, the Hangzhou-based firm revealed at a press conference yesterday. Millions of clients will benefit, Vice President Zhang Qi said.

Alibaba Cloud cut some prices last April, triggering a price war after slashing fees for its core products by between 15 percent and 50 percent. Tencent Cloud, JD Cloud, and other cloud service providers followed suit.

At 30 percent, Alibaba Cloud had the biggest share of China's public cloud market in the first half of last year, a report by International Data Corporation showed last November. But other providers have since been narrowing the gap while the market's growth has slowed.

The latest price cuts are not for short-term market competition but a long-term strategic choice for the company, noted Liu Weiguang, senior VP at Alibaba Cloud and head of its public cloud business department. Cloud computing is a business model with economies of scale, and increasing the number of clients can trim the cost of procurement, research and development, and idle resources, he added.

Lower prices will impact the firm’s short-term financial results, but Alibaba Cloud hopes to thereby attract more small and mid-sized enterprise customers to offset the cuts, Liu added.

Alibaba Cloud's net profit surged 86 percent to CNY2.4 billion (USD333.6 million) in the three months ended Dec. 31 from a year earlier, its earnings report showed on Feb. 7. Revenue rose 3 percent to CNY28.1 billion (USD3.9 billion), accounting for about 11 percent of total income at its parent company.

Last March, Alibaba Group Holding announced a plan to split into six main business units, including its cloud computing arm, but called off the spin-off and separate stock market listing of Alibaba Cloud in November due to the uncertainty surrounding US chip export restrictions.

Editors: Dou Shicong, Martin Kadiev