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Why DFTZ will double Malaysia's SME exports: MDEC CEO Dato' Yasmin Mahmood

AvantiKumar | March 24, 2017
After the official launch of the Digital Free Trade Zone (DFTZ) involving the Malaysian PM and Alibaba’s Jack Ma, MDEC's Dato' Yasmin Mahmood spoke to Computerworld Malaysia on why DFTZ is necessary for the country's Digital Economy drive.

DFTZ - Photo 1 (official)

Photo (from left) Dato' Sri Mohd Najib Tun Abdul Razak, the Prime Minister of Malaysia and Jack Ma, Founder and Executive Chairman of Alibaba Group


  The official launch on 22 March 2017 of the much-heralded Digital Free Trade Zone (DFTZ) will strengthen Malaysia's Digital Economy ecosystem and give a boost to the local burgeoning eCommerce sector, which is seen by government and industry as one of the main catalysts for the country's internet economy.

A key message at the launch is that DFTZ will help SMEs facilitate cross-border transactions as well as ensure seamless logistics. DFTZ will be a boost to Malaysia's eCommerce roadmap that was introduced in 2016, which aims to double the nation's eCommerce growth and increase the GDP contribution to RM211 billion (about US$47.68 billion) by year 2020.

The Digital Free Trade Zone (DFTZ) is all about empowering small and medium enterprises (SMEs) to do cross-border commerce and trade, said national ICT agency Malaysia Digital Economy Corporation (MDEC) CEO Dato' Yasmin Mahmood.

"We will be doubling the growth of SME exports in Malaysia," she added in her opening address at the Kuala Lumpur Convention Centre. "At the same time, the vision is to nurture an ecosystem for Malaysia to be a 'best of class' logistics hub that will serve the ASEAN market for all global brands, as well as all for global market places."

The project is a joint undertaking between MDEC and Chinese eCommerce conglomerate Alibaba Group Holding Ltd, with Malaysia having the first eHub in the world outside of China. The launch was inaugurated by Prime Minister Datuk Seri Mohd. Najib Abdul Razak, with Alibaba Group founder and executive chairman Jack Ma in attendance.

"Malaysians have embraced the internet economy and eCommerce in a big way. We are now leading the eCommerce market in the region generating revenue of US$2.3 billion in 2015. With the launch of the world's first Digital Free Trade Zone, Malaysia will serve as a regional eFulfillment centre, and also become the regional hub for SMEs, marketplaces and monobrands," said  Najib.

"Both DFTZ and Electronic World Trade Platform (eWTP), the brainchild of Jack Ma, have one common goal. We want to help SMEs overcome the complex regulations, processes and barriers, and eventually further encourage businesses and traders to connect and collaborate in cross-border trading," he added.

How DFTZ will work

 The launch ceremony also witnessed the exchanges of Memorandum of Understanding (MoUs) between four parties, and they are:
1. MDEC and Alibaba Group for strategic collaboration in the development of DFTZ in Malaysia consistent with the objective of the Electronic World Trade Platform (eWTP); and the development of a Regional Hub for eCommerce business, trade facilitation, SME on boarding, cloud services for enterprises and an eFulfillment and logistics hub.
2. Malaysia Airports Holdings and Cainiao Network for the development of a regional eCommerce and Logistics Hub in KLIA Aeropolis as part of the Digital Free Trade Zone Initiative.
3. Alipay and Maybank / Alipay and CIMB for the collaboration in launching Alipaybarcode payment in Malaysia. This partnership will enable mainland Chinese tourists to make payment using their favourite payment method - their Alipay e-wallet. For Malaysian merchants, this will give them exposure to the vast China market.
4. MDEC and Catcha Group for the collaboration for the establishment of Kuala Lumpur Internet City (KLIC)


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