Jack Ma opens Malaysia’s ‘digital free trade zone’ with an eye to Southeast Asia’s ecommerce boom

Jack Ma and Prime Minister Najib Razak (second and third from left). Photo credit: Alibaba.

Chinese billionaire and online shopping magnate Jack Ma today opened the doors to a Malaysian free trade zone that’s designed to tap into Southeast Asia’s ecommerce boom.

First announced in March, the Digital Free Trade Zone is now open to trade, with Malaysia’s government anticipating the joint venture with Alibaba will handle US$65 billion worth of goods once in full flow, and create 60,000 jobs by 2025. The aim is that smaller businesses – down to one-person online merchants – can make use of the trade hub as easily as larger companies. It’ll also be used for non-ecommerce purposes, such as for global exports.

“Today we are witnessing a historic moment in Asia where one country has begun to use technology to enable its SMEs [small and medium-sized businesses] and young people to become more competitive on the world stage,” said Ma, founder and chairman of Alibaba, this afternoon. “This is an opportunity for not just the small businesses and young people in Malaysia but across Asia.”

Photo credit: Lazada.

Ma inaugurated the hub alongside Malaysian Prime Minister Najib Razak.

“With the launch today […], Malaysia is progressing its economic transformation vision and taking a step towards becoming the leading sourcing and fulfilment hub in Asia,” said the Prime Minister.

The hub will likely benefit Alibaba-owned Lazada, Southeast Asia’s largest online marketplace, which is made up of a mix of small merchants and big-name brands. Lazada has shoppers in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

Ma may get a double boost as the Digital Free Trade Zone will also increase commerce with China, giving scope for Chinese merchants on Alibaba’s Taobao and Tmall marketplaces to sell to more people both in Malaysia and across Southeast Asia.

All about logistics

Alongside today’s opening ceremony, Malaysia broke ground on a regional ecommerce logistics hub to be developed by Malaysia Airports in conjunction with Cainiao, Alibaba’s logistics wing.

Slated to open in 2019, the facility is designed for “speedy storage, fulfilment, customs clearance, and warehousing operations,” said Alibaba in a statement.

“We believe Malaysia is the ideal location to become a regional hub for ASEAN countries,” said Alibaba CEO Daniel Zhang earlier this year, referring to the regional intergovernmental organisation that covers ten Southeast Asian nations and approximately 625 million people.

Malaysia envisions that easier exports and more efficient logistics will give the nation’s businesses a chance to increase their audience from its 31 million population to the region’s hundreds of millions of people.