KL, Alibaba launch Digital Free Trade Zone

(From far left) Multimedia Development Corporation chief executive Yasmin Mahmood, Alibaba founder Jack Ma, Malaysian Prime Minister Najib Razak and Malaysia Airports Holdings chief executive Mohd Badlisham Ghazali looking at a model of the Digital F
(From left) Multimedia Development Corporation chief executive Yasmin Mahmood, Alibaba founder Jack Ma, Malaysian Prime Minister Najib Razak and Malaysia Airports Holdings chief executive Mohd Badlisham Ghazali looking at a model of the Digital Free Trade Zone at its launch in Sepang yesterday.PHOTO: FOTOBERNAMA

Regional logistics hub aims to help SMEs capitalise on Internet economy, global trade

Malaysia and the world's largest online retailer Alibaba yesterday launched operations at the Digital Free Trade Zone (DFTZ), a regional logistics hub aimed at small and medium-sized businesses.

"We want to redefine global trade... I look forward to the rebirth of the new Silk Road," said Malaysian Prime Minister Najib Razak at the event, which was also officiated by Mr Jack Ma, founder of Alibaba.

"With DFTZ, small businesses can use the digital way to sell and buy things. They can also buy global and sell global," said Mr Ma.

The first phase of DFTZ is a warehousing facility close to Kuala Lumpur International Airport to be operated by national courier, POS Malaysia. The former cargo terminal has already been transformed into a full-fledged warehouse with sorting, shelving and pick-pack facilities that deploy automated guidance vehicles. The facility will initially serve Lazada, the region's largest online retail mall. Alibaba holds an 83 per cent stake in Lazada after injecting US$2 billion (S$2.7 billion) in investments into the Singapore-based start-up.

Datuk Seri Najib and Mr Ma, who was made digital economy adviser to the Malaysian government last November, also held a groundbreaking ceremony to mark the zone's second phase, to be jointly developed by Malaysia Airports Holdings and Cainiao Network, Alibaba's logistics arm. This facility will begin operations in 2020.

Both facilities hope to halve border clearance and handling times for cargo to three hours.

DFTZ has been touted by Malaysian officials and Alibaba as a platform that will propel small and medium-sized enterprises, particularly in Asia, onto the online marketplace. Alibaba has set up a similar hub in Hangzhou, China.

At the launch, Alibaba went live with its electronic trading hub, which will help Malaysian businesses in e-commerce, logistics and cloud computing, as well as in exporting their goods.

Prime Minister Najib also announced that Alibaba will give a boost to Malaysian products in a special "Malaysia week" online promotion next year. "This means that for one week in a year people will hear more of Malaysian products, food, and culture," he said.

Responding to questions about Alibaba's plans in the region after Malaysia's DFTZ, Mr Ma said: "We are interested in building infrastructure… Next is cloud computing for small businesses. Third is training courses for young people to learn how to do business".

Yesterday's launch marked the next step in both Malaysia and Alibaba's plans for a regional logistics hub in the country, first set down in memorandums of understanding between the parties in March.

A version of this article appeared in the print edition of The Straits Times on November 04, 2017, with the headline 'KL, Alibaba launch Digital Free Trade Zone'. Print Edition | Subscribe