ALIBABA TOSETUP RE­GIONAL HUB IN KLIA

The dis­tri­bu­tion cen­tre will gen­er­ate more than RM7 bil­lion in in­vest­ments

New Straits Times - - News -

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

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