DFTZ set to make Straits of Malacca even more strategic

Yasmin Mahmood
MDEC CEO Dato’ Yasmin Mahmood (right) with ASLI CEO Tan Sri Dr Michael Yeoh at the recent “Conference on the Digital Economy & eCommerce”

As the dominating maritime pathway between East and West, the Straits of Malacca has and still plays a significant role in trade. Today thanks to increasingly borderless trade, the effect of technology has turned the straits area into a hub to this region.

Since Alibaba’s entry as a strategic partner in establishing the Digital Free Trade Zone (DFTZ), there has been slight misconception that the relationship is exclusive. In reality, DFTZ is a development of massive proportions and Alibaba the first of many investors.

“Embracing eCommerce is of fundamental importance to the survival and growth of retail businesses. Malaysia has set up massive initiatives to do this, with 25 agencies and ministries coming together under the National eCommerce Council to look at exactly how to respond to and take advantage of the situation,” said Dato’ Yasmin Mahmood, CEO, Malaysia Digital Economy Corporation (MDEC), at the recent “Conference on the Digital Economy & eCommerce” organised by ASLI.

ASLI, or The Asian Strategy & Leadership Institute (ASLI), is Malaysia’s leading independent private Think Tank which is committed to the development of Asian leadership and strategic thinking.  ASLI’s vision is to create a better society, while its mission is to help organisations enhance competitiveness, leadership and strategic capabilities.

“Currently, eCommerce is growing — but it’s growing at a rate of between 10 and 15 per cent. If we do a projection at those figures, it means many of our companies are going to be disrupted, that our small and medium-sized enterprises (SMEs) may not find a place the new world of trade if they do not change with the times,” she said.

For SMEs which had not done so yet, Dato’ Yasmin advises them to make their digital presence felt. It could be in the form of easy-to-use social commerce and marketing on platforms like Facebook and Instagram and some basic website building.

“At the next level, which is eCommerce, these businesses have to look into making their websites even more sophisticated with payment gateways. The final level is about using eCommerce to create and sustain cross-border trade,” she added.

MDEC has always been serious about helping SMEs, and it is imperative that SMEs be given both the opportunity and support to help them because cross-border trading has always proved challenging.

MDEC recently launched a very important initiative for SMEs called the “Go eCommerce” portal. It is an empowerment initiative for SMEs to obtain their own online dashboard, an assessment of their status and together with the necessary advice and training.

eCommerce Platform

For interested SMEs, click here to access the portal.

The DFTZ is the main initiative that MDEC holds to be of paramount importance for the country in achieving its eCommerce ambitions. Being the most visible of all MDEC’s undertakings at the moment, the DFTZ can have a massive impact on trade in Malaysia.

According to Dato’ Yasmin, eCommerce — which is part of the parcel-based logistics versus container-based logistics argument — requires a very different kind of handling. To meet these requirements, Malaysia is starting with an Aeropolis first, because it is a natural step forwards; eCommerce is, to a large extent, all about logistics by air.

“Eventually the Aeropolis will be a DFTZ eLogistics hub — and a lot of work is happening right now to fulfil that purpose,” she said.

“It’s the ideal opportunity for SMEs to make their presence felt throughout the region.”