Regional e-commerce hub in Malaysia kicks into gear as Alibaba bets big on Southeast Asia

SEPANG — The Malaysian government and Alibaba on Friday jointly launched a regional e-commerce hub located near the Kuala Lumpur airport area, as a part of Alibaba founder Jack Ma's vision to create an Electronic World Trade Platform (eWTP) where people can "buy global and sell global."

The operation of the eWTP, first of its kind outside China, coincided with the establishment of a joint venture between Alibaba's logistics affiliate Cainiao and Malaysia Airports Holdings (MAH), in which Cainiao will hold a 70 percent stake while MAH retains the remaining 30 percent, according to a filing sent by MAH to the stock exchange Bursa Malaysia on Friday.

The JV, with a total paid up capital of 206.67 million ringgit ($48.84 million), will implement and carry out the development of the regional e-commerce and logistics hub, comprising the development of cargo terminals, sorting centers, warehouse and fulfillment centers, and other facilities for the e-commerce industry, according to the filing.

Currently, the logistics center is partially operational to serve Lazada, the largest Southeast Asian online shopping platform incorporated in Singapore.

Alibaba said cargo clearance time has been cut from six to three hours, with the help of robots and cloud computing technologies.

A senior executive with Cainiao told Xinhua that the logistics hub will help Alibaba achieve its goal to ship products to anywhere in the world within 72 hours.

The event was witnessed by Jack Ma, also Alibaba's executive chairman, and Malaysian Prime Minister Najib Razak, who is pushing for the Digital Free Trade Zone (DFTZ) to empower small and medium-sized enterprises (SMEs) via e-commerce and logistics.

In his second visit to the southeast Asian nation this year, Ma awed the audience with a pledge to help the young people and SMEs, whom he said didn't get the opportunities in the last 20 years of globalization.

"We want to build up a platform that every small business and any young people, they can global sell global buy global fund (get the money) global pay and global deliver the products through our logistics network, and global have fun and travel," said Ma in his speech.

Najib said a total of 1,972 SMEs have applied to join the DFTZ. In cooperating with Alibaba, the DFTZ initiative can bring high-paying jobs to Malaysia, as many as 60,000 by 2025 and Malaysia can become the regional leader in e-commerce.

The eWTP marked a further step by the Chinese internet giant to bet big on Southeast Asia, after it took Alipay, the mobile payment platform under its affiliate Ant Financial to Thailand and Malaysia and gained controlling stake in Lazada. It also launched its 24-hour Singles' Day Global Shopping Festival in Malaysia this week.

When asked about Alibaba's next move, after it reported a 61-percent surge in its quarterly revenues and 83-percent rise in profits, Ma said the group is interested in building infrastructure and cloud computing for small businesses.