China's e-commerce giant Alibaba group on Wednesday announced a plan to set up an e-commerce hub in Malaysia encompassing logistics, cloud-computing and e-financial service to boost trade and e-commerce in the region.

The e-commerce hub will be part of the collaboration between Alibaba (BABA, quote) and the Malaysian government in the development of a Digital Free Trade Zone (DFTZ) in Malaysia, in line with the Electronic World Trade Platform (eWTP) promoted by Jack Ma, Alibaba's executive chairman.

In launching the DFTZ with Malaysian Prime Minister Najib Razak, Ma said the its first overseas e-hub would be aimed at empowering small and medium enterprises (SMEs) as well as the younger generation.

"This is the first hub specifically designed for small business and young people," he said. "And we are going to use new technology to empower small business and young people."

"There will be a logistics hub, we got one-stop service, we have got big data. As long as you have a good product, you have a good idea, this facility is going to enable you," he said.

For his part, Najib said Alibaba is the "perfect partner" for Malaysia to develop its digital economy.

Among the cooperation announced on Wednesday, Alibaba's logistic platform Cainiao and its e-commerce website Lazada will lead the effort to develop a regional e-commerce and logistics hub near the Kuala Lumpur International Airport.

The initial phase is currently expected to roll out before the end of 2017 by Alibaba, Cainiao, Lazada and Post Malaysia, leading to the planned formal launch by the end of 2019.

Alibaba Cloud, its cloud computing arm, will build a cloud platform in Malaysia to foster the local SMEs, while Ant Financial inked an agreement with Malaysia's leading banks CIMB bank and Maybank to explore collaboration opportunities in e-payment and financing services in Malaysia, with an initial focus on inbound Chinese tourism and promoting trade by Malaysian SMEs.

Daniel Zhang, chief executive of Alibaba Group, said Malaysia is chosen as Alibaba's regional logistics hub for its location as well as the fact that the two sides share the same vision.

"Globalization is Alibaba's long term strategy and today is an important milestone," said Zhang.

Neither Zhang nor Ma gave specific amount of investment that Alibaba plans to make in Malaysia, but Zhang said the group is committed to investing and developing the hub while drawing the long-term plan with the Malaysian side.

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