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MALAYSIA AIRPORTS SIGNS MoU WITH CAINIAO NETWORK TO EXPLORE DEVELOPMENT OF REGIONAL E-COMMERCE AND LOGISTICS HUB IN KLIA AEROPOLIS UNDER DIGITAL FREE TRADE ZONE INITIATIVE

23 March 2017

KUALA LUMPUR – Malaysia Airports announced today it has signed a Memorandum of Understanding (MoU) with Cainiao Network to explore the potential for developing a regional e-commerce and logistics hub in KLIA Aeropolis. This signing was conducted in conjunction with the launch of the world’s first digital free trade zone (DFTZ) outside of China by YAB Dato’ Sri Mohd Najib Tun Abdul Razak, the Prime Minister of Malaysia. 


Under the MoU, the companies have agreed to explore jointly the establishment of a regional e-commerce and logistics hub in KLIA Aeropolis to cater to the business-to-consumer (B2C) and business-to-business (B2B) segments. This is in line with Alibaba Group’s vision to develop an electronic world trade platform (eWTP) to enable SMEs and young entrepreneurs to participate in the global trade easily, equally, freely. 


Among the proposed co-operations, Cainiao and Lazada will lead other Alibaba’s subsidiaries and affiliates to work with Malaysia Airports for the development of the e-fulfilment hub. The initial phase is currently expected to roll out before the end of 2017, leading to the planned formal launch by the end of 2019. 


According to Datuk Badlisham Ghazali, managing director of Malaysia Airports, “Apart from realising our vision to become the global leader in creating airports cities, this collaboration will further support the government’s aim to transform Malaysia into a key sourcing and fulfilment hub for global marketplaces and nurture an ecosystem to drive innovation in e-commerce by tapping on available resources under KLIA Aeropolis.”


Wan Lin, President of Cainiao Network said, “The key purpose for establishing this e-fulfilment hub is to help connect SMEs to world markets via an efficient and cost effective platform so they can benefit from a network effect as more and more e-hubs join the platform. It will help overcome the limitation of the more traditional single linear model in the past that tends to connect just one market to the world. Underpinning the hub is a data platform that will enable both B2C and B2B enterprises to overcome hurdles such as customs clearance. That will in turn help lay the foundation for achieving our goal of 72-hour delivery for anywhere in the world. ” 


KLIA Aeropolis has been selected to be the site of the initial phase for the DFTZ. Launched in mid-2016, its comprehensive master plan is closely aligned to national development agenda and focuses on three key clusters - Aerospace & Aviation; Air Cargo & Logistics; and MICE & Leisure. The Air Cargo & Logistics cluster vision seeks leverage the strategic location of KL International Airport (KLIA) within South East Asia. Further, KLIA’s extensive network connectivity; progressive infrastructure with its three independent runway system and capacity for a future fourth runway; its existing Free Commercial Zone (FCZ); and a ready logistics ecosystem populated with four top worldwide integrators and 20 global freight forwarders also proved to be key factors in the DFTZ site selection. 


“Our aspiration for the Air Cargo & Logistics cluster is to position KLIA Aeropolis as the regional e-commerce Hub anchored by global e-commerce leader such as Alibaba. We hope this will unlock the value of the South East Asia’s e-commerce market which is expected to reach USD88 billion by 2025* ,” Badlisham added further. The development of KLIA Aeropolis is one of four strategic priorities identified in the Malaysia Airports’ five-year business plan, Runway to Success 2020 (RtS 2020), and is an ecosystem development that is synergistic with the airport business that will transform Malaysia Airports in a regional economic enabler.


 * Source: e-conomy SEA report by Google and Temasek


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