Alibaba to set up logistics hub in Malaysia's new digital free trade zone

Alibaba to set up logistics hub in Malaysia's new digital free trade zone

E-commerce giant Alibaba Group is setting up a trade and logistics hub in Malaysia as part of the country's ambitious Digital Free Trade Zone (DFTZ).

Jack Ma and Najib Razak

KUALA LUMPUR: E-commerce giant Alibaba Group is setting up a trade and logistics hub in Malaysia's new Digital Free Trade Zone (DFTZ).

This would be Alibaba's first e-hub outside its home base in China, part of a plan group executive chairman Jack Ma laid out at the G20 summit last year.

Ma said he wants to build an Electronic World Trade Platform (eWTP) - a more inclusive, free and innovative global trading platform for SMEs, the young and consumers. He said Malaysia was the first to take him up on his vision at a meeting with Malaysian Prime Minister Najib Razak last year.

The hub, expected to be launched end-2019, "will function as a centralized customs clearance, warehousing and fulfilment facility for Malaysia and the region, to deliver faster clearance for imports and exports," Alibaba said in a statement.

"People say 'Why Malaysia?' Of course, four months ago when I sat in Beijing ... I did not think we could make it happen, but we made it. Malaysia is very business-friendly. It's efficient. It's much more efficient than I thought," he said.

Ma launched the DFTZ on Wednesday alongside Najib. It is an ambitious project to place Malaysia on the map as the epicentre of Southeast Asia's Internet economy.

Malaysia says it has the potential to double the growth rate of local SME's goods exports by 2025, as well as create 60,000 jobs by then. "SMEs contribute 37 per cent GDP today - 97 per cent of our businesses are SMEs and microenterprises - but from 37 per cent it can grow up to 60 per cent and even 80 per cent,” said Najib. “These are very, very exciting things and I want to assure you that I will drive this personally, together with my ministers. We will drive this together."

The first phase of the Digital Free Trade Zone involves developing a regional e-commerce and logistics hub near the Kuala Lumpur International Airport.

“DFTZ is a testament to Malaysia’s unwavering commitment to propel the growth of SMEs through eCommerce. It also marks a new phase of collaboration between Malaysian and Chinese businesses through the participation of Mr Ma and Alibaba Group.

"I strongly believe that together, we can achieve a more prosperous economic landscape that benefits the industry and people,” Najib commented.

MoUs have also been inked between Alibaba affiliates and Malaysian entities to develop e-payment and financing opportunities as well as talent.

Catcha Group is also involved. It is the master developer of Kuala Lumpur Internet City - a 5-million-square-feet digital hub to be built in Bandar Malaysia. That is estimated to have a gross development value of US$1.13 billion.

Malaysia plans to double the nation's e-commerce growth, increasing its contribution to GDP to about US$50 billion by the year 2020.

Source: CNA/ec