Launched in November 2017 in partnership with Jack Ma, Executive Chairman of the Alibaba Group, the Digital Free Trade Zone (DFTZ) is an initiative by the Malaysian Government focused on developing an ecosystem and catalyst to the booming internet economy and e-commerce activities in Malaysia. The DFTZ is the first e-WTP (electronic world trade platform) established outside China. Spearheaded by Malaysia Digital Economy Corporation (MDeC), the DFTZ has three components:
- eFulfilment Hub: To help SMEs / businesses in exporting their goods easily, with the help of leading fulfilment service providers;
- Satellite Services Hub: To connect SMEs / businesses with leading players who offer services like financing, last mile fulfilment, insurance and other services which are important in cross-border trade;
- eServices Platform: To efficiently manage cargo clearance and other processes needed for cross-border trade.
A traditional duty-free zone is a physical area where goods are imported (duty free) for processing or re-exporting. With the DFTZ, physical and virtual zones are merged with the introduction of more online services to enhance and facilitate international e-commerce. The specific export target for SMEs is USD38 billion by 2025. If reached, this will make Malaysia Asia’s leading transhipment hub that same year. The DFTZ helps SMEs export by “connecting them to eMarketplaces, government agencies, cross border logistics providers, and cross border payment providers.”
Objectives of the Digital Free Trade Zone
• DFTZ will facilitate SMEs to capitalize on the convergence of exponential growth of the internet economy and cross-border trade.
• DFTZ provides a holistic approach key to SMEs growth by connecting them to eMarketplaces, government agencies, cross border logistic providers and cross border payment providers.
• DFTZ will increase the SMEs goods export to USD38 billion, create over 60,000 jobs and support US$65 billion worth of goods moving through DFTZ by 2025.
• DFTZ will make Malaysia Asia’s leading transshipment Hub by 2025.