Editor’s Note: This post was contributed by Sean Konieczny, a tech entrepreneur and extensive traveler. While in Asia, he settled in Beijing and co-founded a digital health data company to provide precision healthcare services that correspond with user health data.
Jack Ma along with several Southeast Asian strategic partners have officially signed Memorandum of Understandings for launching a new digital free trade zone (DFTZ) for all e-commerce focused business.
The DFTZ is the world’s first special trade zone that promotes the growth of e-commerce by providing a state-of-the-art platform for SMEs and enterprises. The zone will enable businesses to freely trade via e-commerce platforms and offer exclusive resources to create a competitive advantage over the traditional e-commerce world.
Jack Ma and the Alibaba Group along with the Malaysian Digital Economy Corporation are leading the cause, reinforced by a tribe of significant partners including the Prime Minister of Malaysia, Najib Razak.
The DFTZ is striving to become the preferred gateway for global brands and regional marketplaces in the e-commerce industry. It will be Alibaba’s first eHub outside of China, as it aims to double Malaysian’s e-commerce growth from 10.8% to 20.8% by 2020 and has the determination to create 60,000 direct and indirect jobs.
Ma’s confidence in digital progression and perhaps some of his animosity toward the Chinese government has sparked his motivation to plant the seed for this global endeavor outside of China. He believes that 90% of the global business world will become internet based over the next 20-30 years. Ma knows he needs fertile soil to propel this initiative and his international intention is part of the reason why Ma is teaming up with Malaysia.
“We want to make sure that it becomes a Malaysian business instead of Alibaba’s business, the eHub belongs to Malaysia and should be operated by Malaysians,” he said.
He also mentioned how Alibaba over the years has been hiring and training many Malaysians in China, only to subsequently send them back to Malaysia to commit to more specialized endeavors. He believes DFTZ should be a local (Malaysian) business, run by the locals.
Malaysia will set the stage, conveniently located in central Southeast Asia, providing resources that can easily converge with India, Indonesia, Singapore, Thailand, and other environs that are on the verge of exponential digital expansion.
The Malaysian-based DFTZ consists of two major elements that will stabilize the foundation for global expansion, DFTZ’s official website explains the Aeropolis and the Internet City.
The Aeropolis, a logistics hub, will strategically handle customs clearance, warehousing, and controlled production along with clearance and exports. The DFTZ will also be directly connected to Hangzhou’s cross-border e-commerce pilot-zone via Alibaba’s OneTouch Service platforms. This enables many trading operations such as customs, foreign exchange, financial services, and logistics to be digitized via the connection with Malaysia.
The 500,000 sq ft Kuala Lumpur-based Internet City is a centralized premier digital hub for inter-related companies to innovate and grow. It will facilitate end-to-end support, networking, and knowledge-sharing that will drive innovation for the uprising internet economy and global e-commerce industry. With the heavy focus on incubation and innovation, Patrick Grove and The Catcha Group are set in place as the main drivers for the project. This means great news for existing businesses and early-stage entrepreneurs who are looking for a launchpad.
Malaysia’s Prime Minister, Najib Razak, will visit Hangzhou next month for the Belt and Road Summit and also make a stop at Alibaba’s Headquarters to continue the conversation. He believes that “[the] DFTZ is a testament to Malaysia’s unwavering commitment to propel the growth of SMEs through e-commerce. It also marks a new phase of collaboration between Malaysian and Chinese businesses through the participation of Mr. Ma and Alibaba Group. I strongly believe that together, we can achieve a more prosperous economic landscape that benefits the industry and people.”
The DFTZ’s vision is to promote innovation for e-commerce through strategy, efficiency, and cost-effectiveness. The goal is to become a best-in-class scalable platform that will set the pace and a global standard for the e-commerce industry. Other e-commerce giants such as Amazon, Rakuten, or JD have yet to embark on such a political and globally-united endeavor.
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