KUALA LUMPUR, Malaysia — Alibaba Group Holding Ltd said on Wednesday it would set up a logistics hub in the Malaysian capital that will serve as the Chinese e-commerce company's regional distribution hub.

The logistics hub "will function as a centralized customs clearance, warehousing and fulfillment facility for Malaysia and the region, to deliver faster clearance for imports and exports," Alibaba said in a statement.

It will be part of a digital free trade zone set to be developed close to the Kuala Lumpur International Airport.

Malaysian Prime Minister Najib Razak launched the free trade zone along with Jack Ma, founder and executive chairman of Alibaba, on Wednesday.

Reuters had reported on Saturday citing sources that Alibaba planned to set up a regional distribution hub in Malaysia to cater to its fast-growing business in the region.

By Liz Lee; editor: Biju Dwarakanath.