Alibaba to splash B11bn on EEC

Alibaba to splash B11bn on EEC

First-phase investment to support digital hub

Chinese e-commerce giant Alibaba will inject 11 billion baht into the first stage of the Eastern Economic Corridor (EEC), the Industry Ministry says, as the group braces for the imminent entry of Chinese rivals JD.com and Tencent and the strengthening of local alternatives like Tarad.com.

Alibaba’s Jack Ma paid a courtesy call on Prime Minister Prayut Chan-o-cha in October 2016. THANARAK KHUNTON

The move signals the beginning of the campaign that Jack Ma's company will wage against JD, Tencent and Thai e-commerce players. The local players' market share is expected to shrink in the face of increasing foreign competition.

Alibaba will also sign four memorandums of understanding, one of which will commit the company to promoting Thai rice and durian in the Chinese market through its platform.

According to Industry Minister Uttama Savanayana, the Smart Digital Hub is scheduled to finish construction by next year.

Alibaba will set up its facility and use its technology to process logistics data, with the expectation of serving shipments between Thailand and China, as well as border trade with Cambodia, Laos, Myanmar and Vietnam.

"Alibaba's big data will connect all logistics systems worldwide fast and efficiently," Mr Uttama said. "Moreover, Alibaba will team up with the Customs Department to upgrade and digitise the clearance process to support Alibaba's operations in the near future."

He said Alibaba's move is expected to increase the competitiveness of Thai startups and small and medium-sized enterprises (SMEs) in terms of new development of products and services to reach the global market.

Moreover, the Smart Digital Hub will be positioned as Alibaba's R&D unit, which the EEC Office expects to link with the government's EEC of Innovation and Digital Park Thailand.

Mr Uttama said Mr Ma will visit Thailand tomorrow to meet Prime Minister Prayut Chan-o-cha and officials at related government agencies to follow up on the future project and sign the four memorandums of understanding for Alibaba's investment in the EEC scheme.

Mr Ma's last visit to Thailand was in October 2016.

Mr Uttama said Alibaba will join hands with the government to develop the digital aspect of human resources and support trade through the e-commerce platform.

"We will have a project called Digital Talent, while Alibaba has also proposed to set up the Alibaba Business School in Thailand," he said. "We will connect with other educational institutions to train students, researchers and lecturers under this project."

Moreover, Thai startups and SMEs will be developed to have more experience and skills in digital technology and integrate with the regional global value chain, for which Alibaba and Industry Ministry will work together with the Industry Transformation Center at the provincial level.

Alibaba will team up with the Tourism Authority of Thailand to run tourism marketing activities through the online platform and connect with the TAT's other channels to develop big data for tourism in the future.

The Commerce Ministry will soon launch the Thai Rice Flagship Store on Tmall.com as the e-commerce channel for rice products and durian in the Chinese market.

Mr Uttama said Alibaba thinks Thailand has the potential to be a digital and regional e-commerce hub, driven by the Thailand 4.0 and EEC initiatives.

He said 68% of the global population owns a mobile phone and active mobile social users worldwide and in Asia-Pacific are showing annual growth of 14% and 16%, respectively.

In addition, revenue from e-commerce businesses is expected to surge from US$3.54 billion (111 billion baht) in 2018 to $5.83 billion in 2022.


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