News / Alibaba e-com hub will give Kuala Lumpur Airport a massive cargo boost

Alibaba’s long-awaited e-fulfilment hub at Kuala Lumpur International Airport (KLIA) is now open for business.

And officials are hoping to see cargo volumes and freighter flights double within a decade.

Billed by the Malaysian government in 2017 as a “game-changing idea by [Alibaba chief] Jack Ma”, they hope the Cainiao Aeropolis eWTP Hub will help turn Malaysia into a major regional player for e-commerce distribution and a leading airfreight gateway in ASEAN.

Malaysia Airports CEO Mohd Shukrie Mohd Salleh said he was confident the 1.1m sq ft facility would help KLIA to double cargo volumes to 1.4m tonnes by 2029.

“We are targeting vertical markets from the automotive, sporting goods, fast-moving fashion and lifestyle, retail electronics and medical equipment sectors, among others,” he explained.

“With the growth in cargo volumes, we are looking at improved airline connectivity with new routes and increased flight frequency, belly space utilisation and freighter capacity.”

He said local industry players like Pos Aviation, MABKargo and GTR would be able to integrate their facilities with the Cainiao hub, and added: “The facility promises seamless cargo entry and exit as it will have an internal customs inspection point to increase security and efficiency and reduce cargo handling time.”

The facility’s first customer is Alibaba-owned Lazada, probably the largest e-commerce platform in South-east Asia, while other companies are “expected to move in soon to establish regional distribution centres”.

In 2018, Alibaba subsidiary Cainaio said it would also establish cargo hubs at Hangzhou, Dubai, Liege and Moscow airports as part of its strategy to provide e-commerce deliveries within 24 hours domestically and 72 hours internationally.

Eric Xu, general manager of Cainiao Smart Hub, said: “As one of Cainiao’s key regional hubs, the Cainiao Aeropolis eWTP Hub will play a strategic infrastructural role in facilitating cross-border trade for SMEs and improving overall consumer experience for imports and exports.”

However, with more and more logistics companies targeting Malaysia’s SMEs for e-commerce cargo, not all forwarders were excited at the prospect of competing with the Alibaba-Cainiao juggernaut.

One local forwarder told The Loadstar Alibaba’s presence would “have a negative impact, given the increased competition from its in-house logistics operations.”