Malaysia Redefines Cross-Border Trade with Digital Free Trade Zone
TL;DR – Malaysia strengthens Digital Economy through the onboarding of over 1,900export-ready SMEs on Digital Free Trade Zone.

DFTZ Goes Live: YAB Prime Minister Dato’ Sri Najib Tun Abdul Razak with Jack Ma hit the gong to officiate

“Back in March, I said Malaysia is set to make it easier for SMEs to do cross-border trade. This is the primary purpose of DFTZ. It is simplifying eCommerce by bringing together government agencies, eMarketplaces, logistic and payment providers all on one platform. Together with Alibaba as a catalytic partner in DFTZ, I am confident that Malaysian SMEs can count on their eCommerce expertise to grow across the region,” – Dato’ Sri Mohd Najib Tun Abdul Razak

What is Digital Free Trade Zone?

On November 3rd, 2017, Dato’ Sri Mohd Najib Tun Abdul Razak, the Prime Minister of Malaysia, together with Jack Ma, Founder and Executive Chairman of Alibaba Group brought-to-life Malaysia’s Digital Free Trade Zone (DFTZ) by flagging off more than 1,900 export-ready Small-Medium Enterprises (SMEs) onboard.

The DFTZ is setup to facilitate seamless cross-border trade with ease and enable local SMEs to export their goods with a priority for eCommerce. To help SMEs with end-to-end cross border trade, DFTZ will have two important components, the eFulfilment Hub and eServices Platform.

First is the eFulfilment Hub. Equipped with the latest technology, the eFulfilment Hub will serve as a cluster of facilities for customs clearance, warehousing and logistics to facilitate and accelerate double digit growth of trans-shipment air cargo volumes thus, positioning KLIA Aeropolis as a leading eCommerce trans-shipment hub.
The eFulfilment Hub will be developed over two phases. The first phase will be at the KACT1, refurbished and operated by POS Malaysia to serve Lazada amongst other eCommerce players. The second phase will be a greenfield development over a 60-acre plot to be jointly developed by Malaysia Airports and CAINIAO Network, the logistics arm of Alibaba. This will be operational in 2020.

Secondly, the eServices Platform, which is to manage cross-border trade efficiently and leverage on the seamless services through an integrated trade facilitation platform that provides access to eCommerce ecosystem players (financing, last mile fulfilment, insurance, digital marketing, and others.

“Since day one of our collaboration, Malaysia has never failed to impress me. I would like to take this opportunity to congratulate the Malaysian Government and all involved in turning DFTZ into a reality. The Electronic World Trade Platform (eWTP) initiative’s goal is to build an inclusive and innovative global trading platform for SMEs, young people and consumers. We are proud to share this vision with DFTZ. I believe that this is the beginning to a long-standing strategic partnership between the two nations. Alibaba Group definitely plans to stay and strengthen our presence here,” – Jack Ma.

YAB Prime Minister Dato’ Sri Najib Tun Abdul Razak and Jack Ma during the live chat session


How can DTFZ help SMEs?

SMEs breakdown according to states in Malaysia

SME Corp. Malaysia is a Central Coordinating Agency that formulates overall policies and strategies for SMEs and coordinates the implementation of SME Development Programmes across all related Ministries and Agencies. It acts as the central point of reference for research and data dissemination on SMEs, as well as provides advisory services for SMEs in Malaysia. SME Corp. Malaysia also assumes the role of the Secretariat to the National SME Development Council which is chaired by YAB Prime Minister of Malaysia.

MATRADE supports SMEs on DFTZ through the TRADE Programme, a programme where Malaysian companies are encouraged to adopt cross border eCommerce to accelerate exports by participating in leading international eMarketplaces. MATRADE first collaboration in the eTRADE Programme was with SMEs will benefit from wide range of support services for trade, including the launch of Malaysian Pavilion on to help promote quality Malaysian products to global buyers. Malaysian SME’s will benefit from Smart Marketing services on the platform which will help SMEs market their products better.

The DFTZ is expected to increase SMEs goods export to US$38 billion as well as create over 60,000 jobs and support US$65 billion worth of goods moving through the DFTZ by 2025.


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