Malaysia's Prime Minister Najib Razak (third from left) and Alibaba chairman Jack Ma (fourth from left) at the opening ceremony of the Digital Free Trade Zone on March 22. Alibaba also announced it will establish a regional logistics center in Malaysia. XINHUA

Internet giant Alibaba is creating an offline-and-online ecosystem of sorts in Southeast Asia to reduce reliance on home market China as well as to grow globally.

Alibaba's businesses span e-commerce, digital payments, logistics and cloud computing.

In Southeast Asia, its units are seeking to serve some 640 million people who are looking for a better quality of life through digital means.

Last year, Alibaba spent $1 billion to buy Southeast Asia's top e-commerce player Lazada Group to enter the region.

This March, it established the region's first Digital Free Trade Zone, the Electronic World Trade Platform in Malaysia, which lowers entry barriers for small businesses and offers easier access to financing.

It is also on course to build an e-commerce and logistics hub in Thailand. The hub is being designed to provide a one-stop service connecting SMEs, manufacturers, service providers and logistics partners.

Other moves include a slew of strategic investments in Thailand, the Philippines and Indonesia by its payment affiliate Ant Financial Services Group. The affiliate is positioned to support Alibaba-backed e-commerce transactions in the region.

Its investment in Thailand's Ascend Money, an arm of Charoen Pokphanda, local agriculture-to-telecoms conglomerate, can give access to local users and merchants.

To make the most of the surge in smartphone usage, Ant Financial will focus on economies covered by the Belt and Road Initiative, which it sees as critical to its future growth. So, it will roll out a number of Alipaylike payment solutions locally.

It will also help its various partners connect through a platform where, for example, customers of India's online payment tool Paytm, backed by Alibaba, can buy goods from Ascend's network in Thailand.

Alibaba would also share its cloud computing and cybersecurity technology with its local partners in the region.

"Alibaba has the capital to outlast local competitors in order to gain market share in the region… but it faces a challenge in Amazon.com, the only competitor with deep pockets and will to battle Alibaba in the region," said Rahul Chadha, a researcher at eMarketer.