The global halal market is increasing worldwide for a few reasons. Previously the main focus of the halal market was towards food but over the recent years growing muslim consumers and a better developed Islamic economic ecosystem have helped propel the sector which is forecasted to be a value of $9.71 trillion USD by 2025 (based on market research study by Adroit) – it’s no wonder why the big fish are paying particular attention.
KFC are opening halal outlets in the western countries, Haribo, the gummy manufacturer opened a halal store in the UK and Japan’s Mitsubishi Corporation acquired Al Islami Foods in 2018. With such a huge sector, naturally related segments will also flourish. According to the same report by Adroit, besides the food & beverages segment, tourism, media, finance, fashion, pharmaceutical, and cosmetics will play a role in growing the global halal market. UAE, Americas, Europe, Russia, France, and Asia will be key markets.
KEY DRIVERS IN THE GROWTH OF HALAL PRODUCTS
- The growth of the global muslim population is set to rise to 2.2 billion by 2030 which equates to just over a quarter of the world population. It is also estimated that in the same time frame the muslim population will grow twice the rate of the non-muslim population.
- The 57 muslim-majority countries that hold membership with the OIC are forecasted to grow at a faster rate than the global economy despite a slow climate.
- Islam is a very important aspect of people’s lives. It is a way of life and goes beyond religion. In a survey of 42 OIC countries 83% of respondents considered ‘religion as very important’ versus a meagre 22% from European countries, and 53% in the US in answer to the same question.
- Many of the OIC nations are now seeing the opportunity at hand and have launched a focus in growing the the halal market through various initiatives such as KSA Vision 2030 and Islamic Economy Initiative by the Emirate of Dubai.
OVERALL COSMETICS MARKET
Based on the Thomson Reuters Report of the Global Islamic Economy, 2015 saw the halal cosmetics market pull in $56 Billion USD versus a total global spend of $750 Billion USD on cosmetics in general. By 2021 the halal cosmetics market is expected to rise to $81 Billion USD registering a 6.5% compound annual growth rate (CAGR). Products in the category include fragrances, personal hygiene products, skin care products and other make up items.
COUNTRIES WITH BEST DEVELOPED ECOSYSTEM FOR HALAL COSMETICS PRODUCTS
- Saudia Arabia
KEY COSMETICS COMPANIES
- Wardah (Indonesia)
- Ivy Beauty Corporation (Malaysia)
- Pure Halal Beauty (UK)
- One Pure (UAE)
TOP MUSLIM CONSUMER COSMETICS EXPENDITURE MARKETS
- India $4.7 Billion
- Russia $3.5 Billion
- Indonesia $3.3 Billion
- Turkey $3.1 Billion
- Malaysia $2.8 Billion
- Bangladesh $2.5 Billion
- Iraq $2.0 Billion
- Kazakhstan $1.9 Billion
- France $1.7 Billion
- Iran $1.6 Billion
An interesting statistic is that 40% of the halal cosmetics consumer market is in non-OIC countries.
OTHER IMPORTANT FACTORS
Financing is always an issues for any new company and even more so in companies in new niches. The halal cosmetics markets has seen a few halal cosmetics companies leverage crowdfunding. Noor Vitamins raised $75,000 after a period 6 month trial period whilst HalalVital reached its target of $72,000.
Due to popularity, multinational brands such has L’Oréal, Unilever and P&G have shown interest too. The high costs associated with manufacturing the products coupled with the lack of standard guidelines are the immediately foreseeable issues that the market may face. Another challenge is the halal backlash due to increased levels of Islamophobia. Without understanding the principles, the world ‘halal’ seems to have derived a negative connotation.
Though there are some examples of companies raising funding, the market is yet to see a significant injection of funds to match amounts that will challenge the existing giants.
The figures of the overall global halal product market show positivity especially in the halal cosmetics segment. It is promising to see great initiatives by OIC nations to promote the market too. The adoption of halal products by the growing muslim population is no doubt a major factor in the increase and hopefully the buying power will help to overcome the handful of issues that the market currently faces.
Originally published on https://pakwired.com