KUALA LUMPUR, Oct. 30 (Xinhua) -- Malaysia's 2018 budget proposals for Digital Free Trade Zone (DFTZ) is expected to boost the e-commerce penetration rate and benefit local carriers as well as airports operator, said Maybank Investment Bank Research in a report on Monday.
In the budget proposals, Malaysian Prime Minister Najib Razak pledged 83.5 million ringgit (19.71 million U.S. dollars) to construct infrastructure for the first phase of DFTZ in Aeropolis, Kuala Lumpur International Airport (KLIA) and raised the import tax exemptions from 500 to 800 ringgit, to establish Malaysia as the regional e-commerce hub.
These moves had reaffirmed Malaysian government's commitment in embracing the digital economy, and will stimulate the e-commerce business, Maybank said in the report.
"As any goods below 800 ringgit will be cleared swiftly, we believe this can cut distribution time significantly and make online purchases more appealing to consumers," it said.
Should the DFTZ sales pick up, Malaysia airliners' may see higher cargo throughput, according to the report.
As the first physical site is located at KLIA Aeropolis, the Malaysian airports holder Malaysia Airports Holding Bhd (MAHB) should be the primary beneficiary.
It is noted that MAHB has signed a joint venture with Alibaba Group to set-up a physical distribution center. The MAHB will obtain additional rental income and possibly a throughput distribution fee from the venture.
Maybank noted that Malaysian consumers have already purchased goods via the e-commerce platforms such as Lazada, Ali Express and 11 Street.
However, the cost of postage tends to be expensive and packages have a run-in with the authorities due to unpaid import duties, restrictions on certain type of goods and other complications.
"The DFTZ aims to remove this complication by including an e-fulfillment hub, services hub and e-service platform. This will be integrated with the custom department systems and therefore enabling a vertically integrated distribution process," it said.
