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Malaysia’s Digital Free Trade Zone goes live with 1,972 SMEs

Malaysias Digital Free Trade Zone goes live with 1

‍Above image: Screenshot from event video on the Malaysia Digital Economy Corporation’s (MDEC) Facebook page/ Credit: MDEC

Malaysia’s Digital Free Trade Zone (DFTZ) became operational
yesterday, in a ceremony officiated by the Malaysian Prime Minister, Datuk Seri
Najib Razak and Jack Ma, the founder and Chairman of Alibaba Group. 1,972 small
and medium enterprises (SMEs) have joined the DFTZ,

The DFTZ was launched
in March 2017. It is an initiative to capitalise on the confluence and
exponential growth of the internet economy and cross-border eCommerce
activities. It aims to facilitate seamless cross-border trade and enable local
businesses to export their goods with a priority for eCommerce.

Speaking at the Go Live event, PM Najib Razak said, “When we
have all this technology, and innovation, what happens is that Malaysians can
now occupy higher paying jobs. DFTZ is about creating 60,000 new jobs in this
area by 2025.”

The DFTZ also aims to double the growth rate of SME’s goods
exports to reach US$38 Billion and facilitate US$ 65 Billion of goods movement
via the DFTZ (exports, imports, transhipments) by 2025.

Jack Ma praised the vision and leadership of the Prime
Minister and how the Malaysian government took away all the barriers to make
this happen. He also said that the DFTZ in Malaysia may be the first model for
the many DFTZ models to come globally.

DFTZ is operated through a
public-private partnership. The Government of Malaysia is the key stakeholder
of DFTZ and is supported by other agencies and local key industry players, as
well as Alibaba Group.

It has three components: 1) eFulfilment Hub (To help SMEs /
businesses in exporting their goods easily, with the help of leading fulfilment
service providers); 2) Satellite
Services Hub (To connect SMEs / businesses with leading players who
offer services like financing, last mile fulfilment, insurance and other
services which are important in cross-border trade); and a 3) eServices Platform (To efficiently
manage cargo clearance and other processes needed for cross-border trade).

Above image: Screenshot from event video on the Malaysia Digital Economy Corporation’s (MDEC) Facebook page/ Credit: MDEC

“The first one (component) to go live is our logisitics hub
with best in class optimised for e-commerce transactions, that are very high
volume and very fast paced. The next component that has gone live today is the brain
of DFTZ, which is the platform which digitises the whole trade facilitation to
make it a very seamless transaction for SMEs to go global and to export. And the
last one, I would say most importantly, it is about flagging of the 1,972 SMEs”
said Datuk Yasmin Mehmood, CEO of the Malaysia Digital Economy Corporation
(MDEC) at the event.

Above image: Screenshot from event video on the Malaysia Digital Economy Corporation’s (MDEC) Facebook page/ Credit: MDEC

The E-Fulfilment Hub has warehouses
with the latest technology including sorting, shelving and pick-pack facilities
and Light Industrial Units) to allow
for minor repair, assembly prior to shipping goods, along with category
specific facilities like secure warehouse and temperature controlled storage.

The first phase of the eFulfilment
hub will be operated by a private free zone operator and the first phase of the
satellite services hub will be operated by a private player, while the
eServices platform is developed and managed by the Government of Malaysia.

The first eFulfilment hub of DFTZ is located at KLIA Aeropolis. This is part of
the Electronic World Trade Platform (eWTP),
promoted by Jack Ma, and is the first such hub for Alibaba outside China. This
is being done
through a joint venture
(JV) 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 first Satellite Services
hub of DFTZ, Kuala Lumpur Internet City (KLICf), is in
Bandar Malaysia. KLIC will be home to key players within the internet ecosystem
to facilitate end-to-end support, networking and knowledge-sharing to drive
innovation in the internet economy and the eCommerce industry.

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