Robert Kneschke - Fotolia

Alibaba to set up digital hub in Thailand

Chinese e-commerce and technology giant Alibaba is expanding its Southeast Asian footprint with a new digital hub east of Bangkok that is expected to boost Thailand’s digital credentials

Alibaba is building a digital hub in the regions east of Bangkok to facilitate cross-border trade between China and Thailand, underscoring the growing footprint of the Chinese e-commerce and cloud computing giant in Southeast Asia.

When ready in 2019, the digital hub, located in Thailand’s Eastern Economic Corridor which spans the provinces of Chachoengsao, Chonburi and Rayong, will use Alibaba’s Cainiao smart logistics network and technologies such as big data and artificial intelligence to digitise customs procedures.

As an open platform, the digital hub will also enable Thai companies to provide services in Thailand’s digital economy, which is expected to be worth $37bn by 2025.

Jack Ma, Alibaba’s executive chairman, said that with China becoming the world’s largest consumer, driven by rising income and a growing middle class, there is no better time for trade-oriented countries such as Thailand to export to China, which continues to open its doors to global trade.

“Quality Thai agricultural products such as fragrant rice, durian and other tropical fruits, in particular, are sought after by the Chinese consumer,” said Ma. “Given Thailand’s unique strengths in people and culture, we are confident of its future and growth potential.”

As one of Southeast Asia’s “tiger cub” economies, Thailand has enjoyed rapid economic growth over three decades. Driven by its export-focused growth strategy, particularly in automobiles, the country’s GDP has expanded more than 12-fold, from $32.4bn in 1980 to $406.8bn in 2016.

However, like most Southeast Asian countries, much of this growth has been driven by foreign direct investments by multinational companies. Although this has helped to develop local talent, there have been calls for countries in the region to start their own innovation engines, particularly in Thailand, whose economy has suffered from political instability in recent years.

Thailand 4.0 was intended to do just that. Spearheaded by the Thai government in 2016, the policy is aimed at giving the country an innovation-led economy, with a focus on key industries such as biotechnology, automotive and agriculture.

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  • Thailand needs to beef up its education system and improve educational outcomes in the longer term as it transforms into a knowledge-based economy.
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Somkid Jatusripitak, Thailand’s deputy prime minister, called Alibaba’s digital hub an “important platform” that will benefit SMEs and farmers, while pushing forward digital economic development in the country.

To get Thai SMEs up to speed in the digital economy, Alibaba will work with various Thai government agencies and the Alibaba Business School to equip SMEs in rural areas and entrepreneurs with the skills to develop online businesses.

Also, Ant Financial, Alibaba’s financial services arm, is in discussions with the Thai authorities to make it easier for Chinese tourists to apply for travel visas, as well as receive tourist tax refunds via Alipay, its digital payments service. This is expected to attract more Chinese tourists to Thailand and increase the country’s tourism receipts, which accounted for more than 20% of its GDP in 2016.

Besides Thailand, Alibaba is also making its presence felt in Malaysia and Indonesia. In 2017, it set up an electronic trading platform and datacentre in Malaysia and a digital free trade zone near Kuala Lumpur International Airport.

In March 2018, Alibaba Cloud, the company’s cloud computing arm, opened the doors of its first datacentre in Indonesia, with Tokopedia, GTech Digital Asia, Dwidaya Tour and Yogrt as its first Indonesian customers.

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