Malaysia Prime Minister Najib Razak officially launched the country’s Digital Free Trade Zone (DFTZ) today at the Global Transformation Forum 2017.
The DFTZ is a policy initiative from Najib, who hopes it will invigorate “internet-based innovation and thus catalysing the Malaysian economy”, according to his speech at the event.
A major goal of the DFTZ is to become an e-commerce hub, in which SMEs and startups can build regional fulfilment centres (as Alibaba plans to do in the near future).
The Prime Minister spoke about a need for Malaysia to embrace e-commerce. To facilitate development, the government will reduce tariffs on goods priced over RM500 (US$112), according to The Star Online.
“The initiative is part of the recently launched National E-commerce Strategic Roadmap which aims to double the country’s e-commerce growth from 10.8 per cent to 20.8 per cent by 2020,” said Najib in the speech.
Najib said wants to make sure the cost of fixed broadband is cut in half and internet speed is doubled by the end of the year.
The main strategic investors in the DFTZ will be Alibaba (who’s Chairman Jack Ma was a keynote speaker at Global Transformation Forum 2017), the Malaysia Digital Economy Corporation and Catcha Group.
Kuala Lumpur Internet City
In conjunction with ‘strategic partners’, Catcha Group will be the master developer, and a main investor, in a project called Kuala Lumpur Internet City (KLIC).
KLIC is expected to become the main digital hub of the DFTZ . It will be located in a major development zone in Kuala Lumpur called Bandar Malaysia. The goal, over a 15-year period, is to build a 5 million square foot digital hub with a projected Gross Development Value of RM5 billion (US$1.13 billion).
Eventually the hope is that KLIC will house about 1,000 companies and 25,000 people. It wants to be open to global, regional and local startups to become an “epicentre of Southeast Asia’s internet economy.”
“I’m extremely excited to be creating one physical location that brings big dynamic internet companies, inspiring entrepreneurs, educational institutions, incubators, accelerators, venture capitalists and government agencies together,” said Catcha Group Co-founder and CEO Patrick Grove in a statement.
“With all the key internet players based within a close proximity of each other and supported by the DFTZ, Malaysia will become the center of gravity for the internet ecosystem of ASEAN,” he added.
An interesting part of the KLIC development plans is its goal to be something of a self-sustaining urban environment. It wants to infuse the area with lifestyle and wellness facilities to make the area more dynamic. For example, this includes bike paths, fitness and health facilities and large open spaces to host community events.
But, at its heart, KLIC will be tech-oriented and hopes to attract the major players in the industry and help facilitate end-to-end support, networking and knowledge sharing.