Global Halal Industry: Realities and Opportunities

Abstract

The purpose of this study is to realize the opportunities of Halal industry exploring the driving factors of this fastest growing industry in the world. The global Halal industry as a whole is estimated to worth around USD2.3 trillion (excluding Islamic finance) a year, is now one of the fastest growing markets. Simultaneously, the global market growth is estimated to reach at an annual rate of 20 percent per annum. Such expansion of the industry is because the global halal market of 2.18 billion Muslims is no longer confined Muslims only. Similarly, the Halal industry is no longer confined to food and food-related products, but rather to include pharmaceuticals, cosmetics, health products, toiletries and medical devices as well as service sector components such as logistics, marketing, print and electronic media, packaging, branding, and financing. This paper attempts to examine the current realities of the global halal industry by observing the factors determining such increasing demand for Halal industry in addition to the opportunities that are offered from on recent global development in the market.� According to the Islamic rules and regulations the word halal is rooted from an Arabic word which means �permissible� or �lawful�. The concept of halal is not bound to food-related items only but to multiple other aspects such as products, which can be further categorized into various groups, for instance, cosmetics, self-care, health, tourism and services. A global survey discovered that the Muslims spend on food, beverages and lifestyles amounting to USD$2 trillion in 2016. Moreover, the global Muslim market spends on travel reaching USD$169 billion in 2016 and expected to increase to USD$283 billion in 2022. Meanwhile, the Muslim average per capita income (GDP) has risen from USD$1763 to USD$6530 from 1993 to 2010. To achieve the objectives of the study, a methodology of analyzing secondary data was adopted in this paper. The sources of all secondary data and information were extensive literature review, library search, a number of different websites, online journal publications, conference proceedings, thesis, different institutional reports and publications. The findings show that there are three major factors driving the rapidly growing global halal market. First, sizable and growing Muslim population at 1.8 per cent per annum, Second, growing economic development and hence increasing purchasing power among the Muslim. Lastly, emergence of the potential halal market in non-Muslim nations and halal industry players. Nonetheless, numerous challenges confronting Halal industry players. These include the standardization of halal, lack of data, animal right, halal is not compulsory in many Muslim countries and others. As a way forward, industry players need to deepen knowledge and understanding of the Muslim market (pattern and behavior), regularly update data, and exploit untapped market niches as well as product sales and promotion. Findings and recommendations of this work will be a great resource for future researchers and scholars in relevant areas as well as policy makers to make their strategic decisions in the fields of Halal Industry.

Impact of internal and external factors on halal logistics implementation

“…Several factors influence the fast growth of the halal industry globally. These factors may consist of the population of Muslims around the world, the growth of the GDP of Muslim countries, the emergence of halal markets, Muslim lifestyle offerings and the growth of the halal ecosystem (Azam and Abdullah, 2020). Moreover, although the concept of halal relates to the Muslim society in particular (Alam and Sayuti, 2011), there is a large potential for the non-Muslim community's interests to be captured when it comes to food (Mathew, 2014).…”

Food and beverage industry competitiveness and halal logistics: Perspective from small and medium enterprises in Malaysia

“…According to Azhar, (2019), Malaysia's export value of halal-certified products was RM40 billion in 2018, and F&B comprised half of the value. Muslim population worldwide, GDP growth of Muslim countries, emerging halal markets, Muslim lifestyle offerings, and the growth of the halal ecosystem are among many factors that affect the demand for halal-certified products (Azam & Abdullah, 2020). The fact that the non-Muslims are also becoming more interested in consuming halal products, as it associates with quality, cleanliness, and safety, enhance the importance of producing more halal products (Battour et al, 2018;Rezai et al, 2012;Wibowo & Ahmad, 2016).…”

Mapping Out Halal Certification in Indonesia and Malaysia: Challenges, Opportunities, and Comparative Advantage

“…The global halal industry has grown exponentially due to the significant growth of the Muslim population, their awareness of Islamic rulings on halal and haram [1], the increase of purchasing power among Muslim consumers [2], and the expansion of halal market itself that has now included non-Muslim as both consumers and players [3]. The steady rise of halal demand has accordingly created a variety of international halal assurance initiatives, especially through the establishment of halal certification bodies and the ratification of halal laws in different countries, Muslim and non-Muslim alike [4].…”

“…Halal certification, however, did not actually start in the Muslim countries, but in the United States in the mid-1960s, initiated by food and technical Muslim experts, primarily to serve the need of Muslims in fulfilling their religious obligation and to preserve their identity in the midst of other, non-Muslim, communities [6]. In the beginning, halal certification applied almost exclusively to food products and beverages, but over time it began to include nonfoods, such as cosmetics and pharmaceutical products, and even services, such as logistics, travel, and tourism [3,10,11]. Today, halal certification is the prerequisite for entering the global halal market [6].…”

“…Thus, halal accreditation serves as a benchmark for food safety, quality assurance, and other useful indicators, not only for Muslim but also non-Muslim customers [12], [13]. Unexpectedly, the largest exporting producer of halal and poultry, for instance, were non-Muslim countries, such as New Zealand and Australia [3]. This paper aims to map out the halal certification process in Indonesia and Malaysia, probe the historical development, identify its institutions and procedures, scrutinize the challenges and opportunities, and, finally, weigh on the comparative advantage to one another.…”