Alibaba's Investment in Malaysia (Photo : Getty Images)
As part of its expansion moves in Southeast Asia, Alibaba founder and executive chairman Jack Ma, together with Malaysian Prime Minister Najib Razak, is expected to announce plans to set up a regional distribution hub in Malaysia, said to be Alibaba's first investment in the country.
Reuters cited sources as saying that the distribution hub is planned to be located within the KLIA Aeropolis, a 24,700-acre land being developed by Malaysia Airport Holding Bhd, the airport operator.
Sources said that Alibaba's hub is expected to generate local and foreign investments that are worth more than 7 billion ringgit ($1.58 billion).
Although it was clear if Alibaba would pour in money but the project will be set up with assistance from Malaysian-backed agencies, the report said.
"Kuala Lumpur International Airport (KLIA) has existing facility for Alibaba Group to pilot their distribution services here, and if (Alibaba) decide to expand in the future, there is the option to build more on other (undeveloped) sites in KLIA Aeropolis," the source was quoted as saying.
According to the source, the hub will become part of Malaysia's Digital Free Trade Zone (DFTZ), also slated to be launched during Ma's visit next week. The setting of the DFTZ was announced in October last year during the national budget session.
"KLIA Aeropolis includes many components and the DFTZ is likely a new component to be added into the development," one source said.
During his official visit to China in November, Najib appointed Ma as an adviser to the government's efforts to establish a digital economy.
According to Malaysian media, Ma was tasked to help direct and develop Malaysia's e-economy through the implementation of online payment and banking schemes.
"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)," the source added.
Last year, Alibaba invested $1 billion to acquire Singapore-based e-commerce platform Lazada, Southeast Asia's largest online shopping platform. The e-commerce giant also raised its shareholding in Singapore Post, from the 10.2 percent acquired in 2014 to 14.4 percent. It also bought a 20-percent stake in Ascend Money, a Thai e-payment service.
China's relation with Malaysia has flourished in recent months as Chinese investments in the Southeast country continue to surge.
In Dec. 2015, China bought some $2.3 billion-worth of assets from troubled-state fund 1MDB.
