ALIBABA TOSETUP REGIONAL HUB IN KLIA

The distribution centre will generate more than RM7 billion in investments

KUALA LUMPUR

CHINESE e-commerce giant Alibaba Group Holding Limited plans to set up a distribution hub in Malaysia to cater to its fast-growing business in the region, two sources aware of the discussions said.

The hub would be sited at KLIA Aeropolis, a 10,000ha development led by airport operator Malaysia Airports Holdings Bhd (MAHB), that is expected to generate more than US$1.58 billion (RM7 billion) worth of domestic and foreign investments.

Alibaba executive chairman Jack Ma and Prime Minister Najib Razak were expected to announce the plans at an event here next week, the sources said.

The hub will be set up with the help of Malaysian state-linked agencies. It was not clear whether Alibaba would invest in the project.

“Kuala Lumpur International Airport (KLIA) has existing facilities for Alibaba Group to pilot their distribution services here, and if (Alibaba) decides to expand later, there is the option to build more on other (undeveloped) sites in KLIA Aeropolis,” one source said.

Alibaba and the Prime Minister’s Office did not respond to requests for comment.

Najib appointed Ma as his government’s digital economy adviser during an official trip to China in November.

Malaysian media reported that Ma, whose Alibaba owns Chinese online shopping business Taobao, would help steer Malaysia’s e-economy development with the implementation of online payment and banking.

“Many people see Malaysia as an emerging hub next to Singapore. Malaysia may not be able to take all of Singapore’s business, but it is a good choice (logistically),” one source said.

This would mark Alibaba’s first investment in Malaysia.

The company invested US$1 billion last year to buy Singapore-based ecommerce platform Lazada, Southeast Asia’s largest online shopping platform.

It also increased its shareholding in Singapore Post to 14.4 per cent from the 10.2 per cent acquired in 2014 and bought a 20-per cent stake in Thai e-payment service, Ascend Money.

Ties between Malaysia and Beijing have blossomed with a surge of investments from China.

China agreed to buy assets from 1MDB for US$2.3 billion in December 2015.

Najib returned from November’s Beijing visit with 14 agreements amounting to US$34.4 billion, which included an agreement to buy four Chinese naval vessels and collaboration to build rail projects in Malaysia.

Sources said the distribution hub would be part of Malaysia’s Digital Free Trade Zone, also slated to be launched during Ma’s visit next week. Reuters

Alibaba executive chairman Jack Ma and Malaysian Prime Minister Najib Razak are expected to announce the plans at an event in KL next week.

SOURCES