Alibaba to open Malaysian distribution hub

Chinese e-commerce giant Alibaba is to open a Malaysian distribution hub at KLIA Aeropolis to serve its growing business in Southeast Asia.

According to unnamed sources quoted by financial press, Alibaba founder Jack Ma and Malaysian prime minister Najib Razak will announce the project at an event in Kuala Lumpur next week.

The new centre will be a major feature of a 1 million sqm KLIA Aeropolis development adjacent to the city’s international airport, under development by Malaysia Airports Holdings. The plan is to create a regional distribution hub, boosting air freight traffic and attracting US$1.58 billion of domestic and foreign investment.

“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,” one source told Reuters.

While Alibaba invested $1 billion to buy Singapore-headquartered online retail Lazada and has built a 14.4 per cent stake in Singapore Post, this will mark the company’s first investment in Malaysia.

The KLIA Aeropolis is part of a planned Digital Free Trade Zone being established in Malaysia, details of which will be released during Ma’s visit to the country next week. Ma has been appointed a digital economy advisor to the Malaysian government.