Chinese e-commerce giant Alibaba Group is said to be in talks with the Thai and the Malaysian governments, seeking the best location and conditions to set up a regional distribution and logistics hub for South East Asia.

In response to last week’s media reports saying that the group would set up the centre in Malaysia, Thailand’s Industry Minister Uttama Savanayana insisted that Alibaba is still interested in establishing its regional logistics hub in Thailand and it will finalise its investment plan by the end of this year.

“Thailand is the best location for developing the regional distribution and logistics system as it connects to Cambodia, Laos, Myanmar, Vietnam and Malaysia,”

he said, adding that “Thailand’s consumer market is larger than Malaysia’s, and we are forming a free-trade zone for product distribution to our neighbouring countries.”

The Chinese conglomerate has expanded its business empire outside China aggressively. It acquired the significant stakes in SingPost’s unit Quantium Solutions International, an end-to-end e-commerce warehouses and logistics services provider in Asia Pacific, in July 2015.

Nine months after the acquisition, Alibaba took a $1-billion control stake in Singapore-based e-commerce platform Lazada, underlining its determination to be a significant player in the Southeast Asia.

Alibaba’s entry makes the competition in e-commerce business fiercer especially for existing e-commerce service providers like Ninja Van, aCommerce and the logistic giant DHL.

Southeast Asia’s appetite for online shopping has increased continuously in line with a smartphone penetration and is forecasted to surge from 175 million units in 2015 to 230 million units this year.

According to eMarketer’s report, e-commerce revenues in six largest markets in Southeast Asia would reach $14 billion in 2016, around 40 per cent up from $10.5 billion in 2015.

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