The Digital Free Trade Zone (DFTZ): Putting Malaysia’s SMEs onto the Digital Silk Road

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The DFTZ was launched in November 2017 in partnership with Jack Ma, Executive Chairman of the Alibaba Group. It aims to connect Malaysia’s SMEs globally through Alibaba-inspired electronic world trade platforms that are being established to support greater exchange between Belt and Road Initiative (BRI) countries.

DFTZ challenges will include:

  • Budgetary incentives to increase imports via e-commerce will intensify competitive pressures on domestic producers, although it can enhance transhipment.
  • E-commerce platform usage will require an SME to have an export strategy, including an understanding of the regulatory regimes and documentation needed from home and importing countries.

It remains to be seen if SMEs will sustain their membership on these platforms once government financial assistance ends, especially if the potential benefits do not materialize as expected, or quickly enough.

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