The strategic move will see the Chinese giant increase its footprint in the lucrative EU market.
On Wednesday, Alibaba Group Holding Ltd stated it has signed an agreement with the Belgium government to launch an e-commerce trade hub. The move will include investments in logistics infrastructure.
The strategic move is part of Alibaba’s Electronic World Trade Platform (eWTP).
Belgium is the first European country to join the project following similar agreements in Rwanda and Malaysia.
As part of the deal, Cainiao, Alibaba’s logistics arm, will lease a 220,000 square meter logistics port at Belgium’s Liege airport and will initially invest $85 million (75 million euros) in the project, which will begin operations in 2021.
“We strongly believe that under the eWTP, we will open up the huge potential for European businesses to reap the benefits of global cross-border trade, especially into the China market,” said Daniel Zhang, Alibaba’s CEO in a statement.
Alibaba’s eWTP has been designed to help countries reduce trade barriers for e-commerce, and includes features to lowering or eliminate tariffs as well as speed up customs clearance.
With this move, Alibaba is expanding the project to Europe. Trade tensions with the United States has forced it o reign in efforts to tap the U.S. market.