Alibaba is planting another flagpost in Southeast Asia. Unlike its $1 billion acquisition of Lazada last year, the Chinese giant is making political moves after it announced a joint partnership with Malaysia’s government to facilitate international e-commerce in the country.
Often overshadowed by India and China, Southeast Asia’s digital economy is tipped for major growth over the next decade. A report co-authored by Google estimates that first-hand online commerce in the region could reach $88 billion-$120 billion per year by 2015. That kind of promise motivated Alibaba to invest in Lazada, the outfit started by Rocket Internet, but it is far from done.
For the new project, Alibaba is working with Malaysia Digital Economy, the country’s digital agency, to develop “digital free-trade zones where small and medium-sized enterprises can easily plug into global trade via e-commerce,” to use Alibaba’s words. The company refers to the initiative as an ‘electronic world trade platform’ or eWTP.
Alibaba has already set one such zone up in China — in its home province Hangzhou — and its plans for Malaysia include an e-fulfillment hub located near capital city Kuala Lumpur’s airport, and an e-hub platform with links to the Hangzhou zone. At this point these are concepts — the basics of the fulfillment hub is expected to be built before the end of this year, Alibaba said — but the idea is to overcome red tape, bureaucracy and other barriers around sending and receiving goods cross-border.
Cainaio, its logistics affiliate, Ant Financial, its financial services affiliate, and Lazada are also involved in the program, which will include payment and financing programs as well as “training programs for startups.”
“The first e-hub under the eWTP outside of China will go a long way towards making global trade more inclusive and provide much needed support to a hugely important constituent: SMEs and the younger generation,” Alibaba executive chairman Jack Ma said in a statement.
An Alibaba spokesperson indicated that the company has plans to introduce a similar initiative in another unnamed country soon. It isn’t hard to deduce that this approach could form a key part of the firm’s blueprint to expand into new markets.