Singapore chosen as overseas HQ by Alibaba's cloud computing arm

Alibaba's headquarters in Hangzhou, China.
Alibaba's headquarters in Hangzhou, China. PHOTO: EPA

SINGAPORE - The cloud computing arm of Alibaba has chosen Singapore as the headquarters of its overseas business, on top of being a site for its new data centre, as the Chinese e-commerce giant expands globally.

"Singapore is a natural destination to be our headquarters for overseas expansion," Mr Ethan Yu, vice president of Aliyun said in a statement on Tuesday (Aug 18).

He added: "The city state is a natural springboard into the Asia Pacific region, not only for us, but for our target audience. We are seeing healthy demand for cloud-related data management services in Singapore because of the ease of doing business, comprehensive transport and telecommunications connections and robust intellectual property regime."

Aliyun's new cloud data centre in Singapore will serve the cloud computing needs of businesses investing in Southeast Asia, with a focus on Chinese businesses.

The data centre is set to launch early next month, and will be Aliyun's seventh globally.

Speaking to CNBC, Mr Yu described the new facility in Singapore as "the most strategic" centre that could "become the biggest we have outside China" and give the cloud division an edge in face of stiff competition from US cloud giants such as Amazon Web Services (AWS) and Microsoft.

Earlier in July, Aliyun's president Simon Hu told Reuters that the cloud division now had the technological maturity to challenge more established players, after focusing on the Chinese market in its first six years.

When asked by CNBC how pivotal a role the Singapore headquarters would play in Aliyun achieving that goal, Mr Yu said: "I would not comment about how long we will take to catch up, but we will definitely take sooner than three or four years to learn the needs of our customers and create value for them."

Aliyun said that its Singapore data centre will have direct connections to its network via Beijing, Hangzhou, Qingdao, Hong Kong, Shenzhen, and Silicon Valley.

Alibaba is cooperating with local service providers to establish the data centre, but the location of the data centre and the number of servers housed there cannot be disclosed as such information is highly sensitive, an Alibaba spokesperson told the Straits Times over the phone.

Singtel is one of Aliyun's local partners in Singapore, after the two entered into a cloud computing alliance in June.

Alibaba opened a Singapore office in 2014, and is looking to recruit more engineers and business development staff, the spokesperson also said.