Digital Free Trade Zone goes ‘live’ tomorrow

KUALA LUMPUR: Malaysia’s stride into the world of digital economy will become a reality when the visionary digital free trade zone (DFTZ) goes “live” tomorrow.

The initiative, said to be the world’s first DFTZ outside China, was launched on March 22, 2017 by Prime Minister Datuk Seri Najib Abdul Razak together with Jack Ma, the founder and executive chairman of Alibaba Group.

DFTZ is now ready to go live with the launch of its logistics operations and Najib will flag off more than 1,500 Malaysian small and medium enterprises (SMEs) for them to begin their export journey, at a ceremony held at Sepang International Circuit.

Among others, DFTZ will provide physical and virtual zones to facilitate SMEs to capitalise on the convergence of exponential growth of the internet economy and cross-border e-commerce activities.

The set-up will include an e-fulfilment hub, satellite services hub and an e-services platform to stimulate growth in electronic trade which will also function to support internet companies to trade goods, provide services, innovate and co-create solutions.

Malaysia Digital Economy Corporation (MDEC), the lead agency in driving Malaysia’s digital economy, is confident DFTZ will boost Malaysia’s e-commerce roadmap that was introduced in 2016, aimed at doubling the nation’s e-commerce growth and increase the Gross Domestic Product contribution to RM211 billion by 2020.

Najib was reported as saying that both DFTZ and the Electronic World Trade Platform (eWTP), another brainchild of Ma, have one common goal.

“We want to help SMEs overcome complex regulations, processes and barriers and eventually further encourage businesses and traders to connect and collaborate through cross-border trading,” he said.

Focus has been given to this new industry, which is believed to provide a handsome number for the economy.

As a result, Najib, in the recent 2018 Budget, announced that the first phase of DFTZ would see the participation of some 1,500 SMEs and they were expected to attract RM700 million worth of investments and create 2,500 jobs.

But, it is understood that the number of participating SMEs had increased to 2,000 recently, hence, surpassing the initial target.

The government, via its budget tabling, also announced an allocation of RM83.5 million for infrastructure construction for the first phase of the DFTZ in Aeropolis, Kuala Lumpur International Airport (KLIA), to create a regional gateway for
e-commerce.

Thus far, four memorandums of understanding (MoUs) were signed in March towards the enhancement of
e-commerce.

The first MoU was between MDEC and Alibaba Group for strategic collaboration in the development of DFTZ in Malaysia, regional hub for e-commerce business, trade facilitation, SME onboarding, cloud services for enterprises and an e-Fulfilment and logistics hub.

The second MoU was between Malaysia Airports Holdings Bhd and Cainiao Network for the development of a regional e-commerce and logistics hub in KLIA Aeropolis as part of the DFTZ Initiative.

Meanwhile Alipay, the third-party mobile and online payment platform, signed an MoU with Malayan Banking and CIMB, to launch the Alipay barcode payment in Malaysia.

This partnership will enable mainland Chinese tourists to make payment using their favourite payment method – their Alipay e-wallet.

The fourth MoU was between MDEC and Catcha Group for collaboration in the establishment of the Kuala Lumpur Internet City.

Further expansion of the DFTZ is being planned for beyond 2019. – Bernama