FAQ

  • The DFTZ is an initiative that capitalizes on the confluence and exponential growth of the internet economy and cross-border eCommerce trade in Malaysia.
  • The DFTZ is setup to facilitate seamless cross-border trade and enable local SMEs to export their goods with a priority for eCommerce in Malaysia.
  • DFTZ will have three components, namely the eFulfillment Hub, Satellite Services Hub, and eService Platform.
  • DFTZ’s objectives are to enable global marketplaces to source from Malaysian manufacturers / sellers.
  • Make Malaysia the regional fulfilment hub for global brands to reach ASEAN buyers.
  • To facilitate SMEs to capitalise on the convergence of exponential growth of the internet economy and cross-border eCommerce trade.
  • The eServices platform is a unique element of the DFTZ. It will digitally connect users with government and business services to support cross-border trade.
  • In the future, this digital platform can be connected to similar platforms in other countries to make cross-border trade even easier.
  • Malaysia is among the first countries to embark on the digital eServices platform.
  • Help SMEs to export their products globally with ease
  • Enable global marketplaces to source from Malaysian manufacturers/ sellers
  • Make Malaysia the regional fulfilment hub for global brands to reach ASEAN buyers
  • Nurture an ecosystem to drive innovation in ecommerce and internet economy
  • Location/Facilities: Provide global best-in-class facilities and convenient location, leveraging latest technology and innovation for efficient cross border trade. Examples of facilities include modular warehouses with latest technology including sorting, shelving and pick-pack facilities.
  • Services: eServices platform including integrated services for DFTZ users. The eServices Platform will be an integrated system that connects online services by global eCommerce companies to the relevant Malaysian public sector systems to provide a seamless journey for exporters and importers to conduct their business online
  • Regulatory Processes: more efficient cargo clearance, primarily with regards to permit processing and cargo movement
  • E-Fulfilment Hub
    • Warehouses with latest technology including sorting, shelving and pick-pack facilities
    • LIU (Light Industrial Units) to allow for minor repair, assembly prior to shipping goods
    • Customs inspection & quarantine area
    • Category specific facilities like secure warehouse, temperature controlled storage and other facilities
  • Satellite Services Hub
    • Office space including co-working spaces
    • O2O (offline to online) showrooms
    • MICE facilities, training centres
    • Creative design elements, eco-friendly buildings
    • Large open spaces for community activities
  • Services
    • Government – Customs clearance, quarantine, permits, industry compliance, cross border trade advisory and others
    • Business services – Warehousing & fulfilment, freight forwarding, last mile delivery, return s handling, payment, insurance, web hosting, IT and others
  • Double the growth rate of SME’s goods exports to reach US$38 Billion by 2025
  • Create 60,000 jobs (direct+ indirect) by 2025
  • Facilitate US$ 65 Billion of goods movement via the DFTZ (exports, imports, transhipments) by 2025
  • The first eFulfilment hub of DFTZ will be located at KLIA Aeropolis
  • The first Satellite Services hub of DFTZ, Kuala Lumpur Internet City (“KLIC”), will be in Bandar Malaysia
  • SMEs and Malaysian manufacturers/ brands looking to export
    • Global brand owners looking to set-up a regional hub to reach ASEAN customers
    • Marketplaces looking to source from and use Malaysia as a hub
    • Local and global service providers (fulfilment, last-mile delivery, payments, insurance, and other service providers)
  • Provide market access to SMEs for them to reach global customers with the help of leading marketplaces
  • Simplify and accelerate cargo clearance process with the help of eServices platform
  • Provide end-to-end support to businesses for cross-border trade, networking and knowledge sharing to drive innovation within the internet ecosystem
    • Leading eFulfilment services (warehousing, pick, pack, labelling, and others)
    • Access to eCommerce ecosystem players (financing, last mile fulfilment, insurance, digital marketing, and others)
  • Provide the right ecosystem and facilities for brands to use Malaysia as a transhipment hub to reach ASEAN customers
  • The DFTZ is the Government of Malaysia’s key initiative, along with other agencies and local key industry players as well as Alibaba Group
  • Other key drivers and stakeholders include the Ministry of Finance (MOF), Malaysia Digital Economy Corporation (MDEC), Ministry of International Trade and Industry (MITI), the Ministry of Transport (MOT), Royal Malaysia Customs Department, Malaysia Airports Holdings Berhad, POS Malaysia, the Malaysia External Trade Development Corporation (MATRADE), and SME Corp
  • The DFTZ will be operationalized in phases. The initial phase will be rolled out before the end of 2017 through a public-private partnership.
  • DFTZ does not alter the GST Act.
  • For exported goods, GST will not be applicable, as per the GST Act
  • For imported products, or any domestic sale of products from the DFTZ, applicable GST will be levied
  • SMEs will benefit from wide range of support services for trade, including the launch of Malaysian Pavilion on Alibaba.com to help promote quality Malaysian products to global buyers
  • Malaysian SME’s will benefit from Smart Marketing services on the platform which will help SMEs market their products better
  • The first phase of the eFulfillment Hub is currently operational and located at (KLIA Air Cargo Terminal 1) KACT1. It has been refurbished and is operated by POS Malaysia to serve Lazada amongst other eCommerce players. The will be expanded to support other eCommerce and logistics operators.
  • Phase one of the eFulfillment Hub comes with the latest technology including sorting, shelving and pick-pack facilities from a RM60 million investment from POS Malaysia to upgrade and renovate the facility.
  • The second phase will be a greenfield development over a 60-acre plot to be jointly developed by Malaysia Airports and CAINIAO Network, the logistics arm of Alibaba. This will be operational in 2020.
  • 2018 will see further growth for the platform. DFTZ will be extended to Port Klang (sea) and Bukit Kayu Hitam (railway). SMEs can expect further connectivity that will allow them to leverage on the confluence and exponential growth of the internet economy and cross-border eCommerce activities. These growths are essential to facilitate B2B export growth of our local SMEs as well as to position and establish Malaysia as a Regional Hub.
  • DFTZ will have three components:
    • eFulfillment Hub: To help SMEs / businesses in exporting their goods easily, with the help of leading fulfilment service providers.
    • Satellite Services Hub: Premier digital hub for global and local internet-related companies targeting Southeast Asia, facilitating end-to-end support, networking and knowledge sharing.
    • eServices Platform: Enables Malaysian SMEs to manage cross-border trade efficiently and leverage on the seamless services through an integrated trade facilitation platform.
  • DFTZ will offer set up, fulfilment, logistics, corporate and government services.
    • Government – Customs clearance, quarantine, permits, industry compliance, cross border trade advisory and others
    • Business services – Warehousing & fulfilment, freight forwarding, last mile delivery, return s handling, payment, insurance, web hosting, IT and others
  • DFTZ aims to help local SMEs export their products globally, with ease.
  • DFTZ will facilitate SMEs to capitalise on the convergence of exponential growth of the internet economy and cross-border eCommerce trade.
  • The DFTZ will provide seamless services through an integrated trade facilitation platform to Malaysian SMEs exporting.
    • Provide market access to SMEs for them to reach global customers with the help of leading marketplaces
    • DFTZ will help bring in world-class efficiency in cargo clearance and CTO operations from 6hrs to 3 hrs at KACT
    • Provide end-to-end support to businesses for cross-border trade:
      1. Leading eFulfillment services (warehousing, pick, pack, labelling, and others)
      2. Access to eCommerce ecosystem players (financing, last mile fulfilment, insurance, digital marketing, and others)
    • Provide the right ecosystem and facilities for brands to use Malaysia as a transhipment hub to reach ASEAN customers.
  • The Malaysian Pavilion on Alibaba.com was launched to help promote quality Malaysian products to global buyers.
  • DFTZ stands out with its two components setup to facilitate seamless cross-border trade and enable local SMEs to export their goods with a priority for eCommerce.
  • eFulfilment Hub: To help SMEs / businesses in exporting their goods easily, with the help of leading fulfilment service providers.
  • eServices Platform: Enables Malaysian SMEs to manage cross-border trade efficiently and leverage on the seamless services through an integrated trade facilitation platform.
  • Among the top 10 product categories preferred by Malaysian SMEs participating in DFTZ are related to Food & Beverage, Beauty & Personal Care, Furniture, and Health & Medical.
  • DFTZ is a key component to the national economy and will play a critical role in catalyzing Malaysia’s development towards becoming a high-income nation.
  • DFTZ is a game changer for the Malaysian economy. DFTZ is expected to double the growth rate of SMEs’ export to US$38 billion, create 60,000 jobs and facilitate US$65 billion of goods, by 2025.
  • We are working with Alibaba to drive the growth of the digital economy and the establishment of DFTZ in Malaysia. We will achieve that goal through cooperation on DFTZ in line with their eWTP concept to help lower trade barriers and make it easier for SMEs to participate in global trade.
  • eWTP aims to advance the growth of inclusive trade and the digital economy for the benefit of SMEs and young people; build the capacity of developing countries and SMEs to engage in the digital economy; promote transparency and access to information, expand global value chains and financing for SMEs; facilitate SMEs and internet-enabled trade by removing trade, investment and regulatory barriers.
  • Malaysia’s DFTZ is the first eWTP hub that digitizes trade to support SMEs, making DFTZ the pioneer partner of eWTP.
  • SMEs will benefit from wide range of support services for trade, including the launch of Malaysian Pavilion on Alibaba.com to help promote quality Malaysian products to global buyers.
  • Malaysian SME’s will benefit from Smart Marketing services on the platform which will help SMEs market their products better.
  • The first phase of the eFulfillment Hub is currently operational and located at KACT1. It has been refurbished and is operated by POS Malaysia to serve Lazada amongst other eCommerce players. The will be expanded to support other eCommerce and logistics operators.
  • Phase one of the eFulfillment Hub comes with the latest technology including sorting, shelving and pick-pack facilities from a RM60 million investment from POS Malaysia to upgrade and renovate the facility.
  • The second phase will be a greenfield development over a 60-acre plot to be jointly developed by Malaysia Airports and CAINIAO Network, the logistics arm of Alibaba. This will be operational in 2020.
  • The Satellite Services Hub of DFTZ will be Kuala Lumpur Internet City, the premier digital hub for global and local internet-related companies targeting Southeast Asia. KLIC will be home to key players within the internet ecosystem to facilitate end-to-end support, networking and knowledge-sharing to drive innovation in the internet economy and the eCommerce industry.
  • Kuala Lumpur Internet City (KLIC) is set to be the premier digital hub for global and local internet-related companies targeting Southeast Asia and will facilitate end-to-end support, networking and knowledge-sharing that will drive innovation in the internet economy and the eCommerce industry.
  • KLIC will be home to key players within the internet ecosystem to facilitate end-to-end support, networking and knowledge-sharing to drive innovation in the internet economy and the eCommerce industry. Globally, it will be the largest digital hub for global tech-based industries. Aimed at both regional leaders and local startups, Southeast Asia will be one of the world’s fastest growing tech region.

Responses to CNBC queries

  • DFTZ showcases Malaysia’s efforts in developing and driving an international eCommerce hub. It provides a holistic approach key to local SMEs growth by connecting them to eMarketplaces, government agencies, cross border logistic providers, cross border payment providers, etc.
  • The DFTZ was conceptualised by the Malaysian Government with two key objectives in mind: drive Malaysian SME exports by leveraging on digital technology and position Malaysia as a regional transhipment hub.
  • The DFTZ’s objective of driving exports of Malaysian SMEs is in line with Alibaba’s vision for the eWTP initiative of reducing barriers and making it easy for SMEs to go global. For this reason, Malaysia is in strategic collaboration with Alibaba to be a catalyst and kickstart the DFTZ.
  • The DFTZ has commenced operations at the KLIA as the DFTZ pilot site in November of 2017 with Alibaba as a catalytic partner. Through this partnership, Alibaba will be setting up a eFulfilment Hub in Malaysia over two phases. The first phase will be at the KACT1, refurbished and operated by POS Malaysia to serve Lazada amongst other eCommerce players. The second phase will be a greenfield development over a 60-acre plot to be jointly developed by Malaysia Airports and CAINIAO Network, the logistics arm of Alibaba. This will be operational in 2020. This partnership will also lead to knowledge exchange.
  • We are talking to several other marketplaces and our vision is to see many more eCommerce players coming on board as partners to make the most of the DFTZ.
  • DFTZ presents the opportunity to link and enable local and global entities such as logistics, efulfillment, warehouse players as well as e-marketplaces and business service providers to enrich the DFTZ ecosystem and expand to other international airports and major seaports in Malaysia.
  • The DFTZ eServices platform is developed by Malaysian companies and managed by an agency of the Malaysian Government. As processes are being digitized to achieve process improvement and simplification and to enhance cost competitiveness of our SMEs, all relevant laws and regulations in handling data are being adhered to including Malaysia’s personal data protection law.
  • Additionally, with the digitization of processes and aggregation of data and services, DFTZ will create a seamless trade facilitation, bringing in time and cost efficiency. For instance, a local exporter of fruits and fruits-based products, DULAI FRUITS ENTERPRISE, saw greater efficiency in operations and distribution after doing trade through the DFTZ. DFTZ allowed Dulai Fruits Enterprises to ship smaller shipment via air, resulting in 30%- 50% reduction in air fares.
  • As mentioned, a key objective of the DFTZ is to drive exports of Malaysian SMEs. On 3 November 2017, DFTZ went live about 2000 SMEs ready for export. This year, our aim is to have 10,000 SMEs onboard DFTZ. The SMEs onboard DFTZ have already started seeing benefits and have witnessed growth and market expansion. One of them is Afiq Trading Co. This local Malaysian company is in the business of trading agricultural products like coconuts, seaweed and fresh/ dried fruits. To date, Afiq Trading Co has successfully exported fresh coconuts to Poland and even secured orders from UAE, India, USA and China. Another example is Yanming Resources who through opportunities offered by the DFTZ, has increased its revenue from bird’s nest products fivefold.