Alibaba’s ‘Open Sesame’ to Thai investments

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In another sign of Alibaba’s increasing footprint in South East Asia, its executive chairman and founder, Jack Ma, has signed four Memorandums of Understanding (MOU) with Thailand’s government in April.

The four MOUs will see Alibaba Group build a smart digital trading hub in Thailand Eastern Economic Corridor (EEC) and help develop Thailand’s e-commerce, digital logistics, tourism and training.

This is the second such link Alibaba has within South East Asia. Last year, it teamed up with the Malaysian government to set up a Digital Free Trade Zone at Kuala Lumpur International Airport. The new “Smart Digital Hub,” will be up and running from next year, according to local media who priced it at $350 million. This was not officially confirmed.

The Hub “will leverage technologies from Alibaba and its logistics platform, Cainiao Network, to streamline trade between Thailand and China and other markets, including digitizing the Customs process,” Alizila, the corporate news service of Alibaba, reported.

Initial gainers, and the first wave of new air cargo, are likely to come from Thailand’s more traditional products as Chinese consumers are increasingly seeking out high-quality agricultural goods from overseas; with Thailand very much top of their shopping list.

As part of the agreement, a Thai Rice Flagship Store was launched on Alibaba’s Tmall.com, which can be accessed by 1.4 billion Chinese consumers. Thai commerce minister Sontirat Sontijirawong said the store would help exporters of Thai rice and rice products reach the Chinese market. The ministry also plans to launch of Thai durian sales campaign in the online retailing website to be followed, later on, by more Thai fruits such as mangosteen, mango, coconut and custard apple.

The EEC is a key to Bangkok’s plans to modernise the country’s economy by offering foreign investors a package of incentives to move there, especially if they are in new high-yielding industries of the sort requiring air cargo services. Planned infrastructure includes a high speed railway link and new cargo facilities at U-Tapao airport.