With Digital Free Trade Zone (DFTZ) Malaysia is emerging as e-Commerce hub in ASEAN.

Headed by Ministry of International Trade and Industry, the DFTZ is a special kind of trade zone that aims to enhance e-Commerce in the country by establishing Malaysia as region’s leading logistics center.

More importantly, the initiative is expected to unfold immense business opportunities for Small and Medium Enterprises (SMEs) in this Southeast Asian nation. It will facilitate them to capitalize on the convergence of swelling growth of the digital economy and cross border trade. The initiative also aims to develop the country as ASEAN’s fulfillment hub with leveraged platform enhancing SMEs’ market access and reach throughout the region.

The much-heralded initiative that consists of three key components—e-Fulfillment Hub, Satellite Services Hub and e-Services Platform—will be merging physical and virtual spaces extending both the services—online and offline. The components will be contributing especially in the growth of SMEs as they have better and easy access to supply chain ecosystem.

  • e-Fulfillment Hub: The component aims to develop Kuala Lumpur International Airport (KLIA) Aeropolis as an aviation, air cargo and logistics hub for the country and the region. It will particularly benefit SMEs by removing barriers to trade and reducing cargo clearance time and simplified documentation procedures.
  • Satellite Services Hub: It envisions to bring both—domestic and global e-Commerce participants—into the digital ecosystem by developing Kuala Lumpur Internet City in Bandar. This will make the city region’s digital hub.
  • e-Services Platform: Through integrated and accelerated trade facilitation platform, it extends support for cross border trade, market access, etc.

Since the launch of initiative in November last year, the number of SMEs embracing DFTZ platform is increasing significantly since their participation in the DFTZ platform is not just helping them to market their products but is also unlocking massive opportunities to enhance the exports across the region.

Moreover, government of Malaysia expects DFTZ to be a boost to Malaysia’s e-Commerce roadmap that was introduced two years back, 2016. With the launch of initiative, the country aims almost to double the e-Commerce growth at Cumulative Annual Growth Rate (CAGR) of nearly 21% by 2020 from almost 11% in 2016.

For more information on “Malaysia e-Commerce Market” please visit https://store.frost.com/malaysia-e-commerce-market.html

Naveen Mishra Industry Principal – Digital Transformation, Asia Pacific. He can be reached at naveen.mishra@frost.com