What eCommerce boosts will Malaysia receive from Alibaba's post DFTZ moves?

In the wake of DFTZ, MDEC's Dato' Yasmin, Alibaba's Jack Ma sign major new digital gateway deals in China in the presence of the Malaysian PM and Hangzhou's Municipal government.

By AvantiKumar
May 15, 2017

MDEC, Alibaba in China tripartite deal

Photo - Tripartite MOU signing ceremony between (from left) Xu Liyi, Mayor of the City of Hangzhou; Dato'Yasmin Mahmood, CEO of MDEC; and Daniel Zhang, CEO of Alibaba Group.  Witnessed by Dato' Sri Mohd Najib Tun Abdul Razak, Prime Minister of Malaysia; Che Jun, Secretary of Communist Party of China's Zhejiang Provincial Committee; and Alibaba Group Executive Chairman Jack Ma.


  Following the recent launch of Malaysia's Digital Free Trade Zone (DFTZ), two new moves involving the Malaysian government and Alibaba will forge a digital gateway to global expansion for local businesses.

On Friday (12 May 2017) in Hangzhou, China, national ICT agency Malaysia Digital Economy Corporation (MDEC) signed an agreement involving eCommerce giant Alibaba Group and Hangzhou's Municipal government, which will allow a link between DFTZ and Hangzhou Municipal's own e-hub under the Electronic World Trade Platform (eWTP).

On the same day, Alibaba founder Jack Ma's vision of facilitating global trade vision (eWTP) for small and medium enterprises (SMEs) saw another move - an announcement that  Alibaba Cloud, the cloud computing arm of Alibaba Group, is to establish a datacentre  in Malaysia later this year. The planned datacentre will become the first global public cloud platform in the country.

In March this year, MDEC chief executive officer Dato' Yasmin Mahmood explained to Computerworld Malaysia the potential economic impact of DFTZ to local businesses. At that time, Jack Ma also painted a wider picture of Malaysia's role in a digital version of the Silk Trade Road.

Also in March, Alibaba Group established the first overseas e-hub under eWTP with MDEC, which is near the Kuala Lumpur International Airport, a one-stop online cross-border trading services platform, cooperation in e-payment and financing, and the development of e-talent training that will support Malaysia's planned transformation into a digital economy.

 What happens next?
  Dato' Sri Mohd Najib Tun Abdul Razak, prime minister of Malaysia, and Che Jun, who is secretary of Communist Party of China's Zhejiang Provincial Committee, together with Alibaba Group's executive chairman Jack Ma witnessed the signing of the tripartite memorandum of agreement in Hangzhou.

Jack Ma shows Malaysian PM around Alibaba HQ

Photo - Alibaba Group Executive Chairman Jack Ma taking Prime Minister Dato' Sri Mohd Najib Tun Abdul Razak and his delegation for a tour at the Alibaba Hangzhou Headquarters.

 "Fostering closer partnership with China is imperative to sustaining our economic growth, and e-business and commerce is clearly the future of global trade," said Najib. "It is therefore exciting to witness the forming of a partnership between government and reputable private enterprises, who will work together to lay the foundation for a more efficient conduct of cross-border trade in the Internet age, to the benefit of all." 

The aim of the agreement is to connect China's (Hangzhou) Comprehensive eCommerce Pilot Zone with Malaysia's DFTZ by the development building of an infrastructure, which allows seamless cross-border eCommerce trade between Malaysia and China.

Moving forward, the three parties will look at potential strategic collaborations, consistent with Alibaba's vision of eWTP. The eWTP initiative, which is designed to remove trade barriers, was accepted as a major policy recommendation of the Business 20 (B20) and officially included in the 2016 G20 Leaders' Communique.

Some of the arrangements to ease cross border trade for SMEs will include Alibaba's internet and data technologies, public and private enterprise collaborations in Hangzhou and Malaysia, together with enhanced customs clearance, inspection and permit issuance. 

Alibaba's B2B business has already launched its Malaysian SME onboarding and external trade promotion programme, as well as working with local universities to offer eCommerce training to SMEs. The Group's B2C business is also committed to helping manufacturers and merchants in Malaysia to sell their products globally. 

Other initiatives include: 
- Ant Financial partnership expansion to six local banks and financial institutions in providing e-payment, with an initial focus on inbound Chinese tourism and promoting trade by Malaysian SMEs. 
- Cainiao, Alibaba's logistics affiliate, Lazada, Alibaba's eCommerce arm in Southeast Asia, and Pos Malaysia will work together to set up an eCommerce regional distribution centre, which is expected to come into operation later this year. 

It is anticipated that private enterprises, such DHL's recent eLogistics arm launch, may establish or expand eCommerce related initiatives in Malaysia.

"eCommerce is becoming increasingly globalised and it is transforming the way commerce is conducted," commented Jack Ma. "With the creation of eWTP, we and partners will build the infrastructure to empower SMEs and young entrepreneurs to succeed in this era of data technology."

"Today's announcement has opened up a gateway to global success for small businesses in the two countries," he added. "It is our hope that more and more countries and SMEs around the world will benefit from a more level playing field." 

 Alibaba Cloud in Malaysia
 Cloud computing and big data analytics will play a critical role as the computing infrastructure of eWTP.
Simon Hu, senior vice president of Alibaba Group and president of Alibaba Cloud explained that a datacentre - to drive the country's first global public cloud platform - will be established in Malaysia later this year.
This will provide enterprises in Malaysia and the region with scalable and cost-effective cloud capabilities to support their global expansion, said Hu.

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