Malaysia and Alibaba launch regional logistics hub

Malaysian Prime Minister Najib Razak with Jack Ma looking at a model of the Digital Free Trade Zone at its launch in Sepang on Nov 3, 2017. BERNAMA

SEPANG - Malaysia and the world's largest retailer Alibaba on Friday (Nov 3) launched 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 launch of the Digital Free Trade Zone (DFTZ), alongside Alibaba founder Jack Ma.

"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 in his speech.

The first phase of DFTZ is a warehousing facility close to Kuala Lumpur's 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 startup.

Datuk Seri Najib and Mr Ma, who was made digital economy adviser to the Malaysian government in November 2016, also held a groundbreaking ceremony for the zone's second phase, a 24ha new facility to be jointly developed by Malaysia Airports Holdings Berhad and Cainiao Network, Alibaba's logistics arm. This facility will only 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, on to 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.

Mr Najib also announced on Friday that Alibaba will promote 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 doing business".

Friday'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.

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