Industry News

For the Muslim world’s e-commerce market, which encompasses eight silos worth $1.6 trillion, there’s a lot of homework to do.

In what is potentially the largest IPO in the United States, Alibaba Group Holding generated more buzz than the combined media hype of Facebook, Weibo, Gaopeng, and even Google. Alibaba's charismatic chairman, Jack Ma, has demonstrated the leap forward in non-Amazon businesses by demonstrating the online commerce template in a challenging environment. However, Alibaba's 14-year rocket-like trajectory in China will ultimately see it land on the New York Stock Exchange (NYSE), raising approximately $200 billion.

For the Muslim world's e-commerce market, which encompasses eight silos worth $1.6 trillion, there's a lot of homework to do. Those trying to capture this space must first identify those six gaps and connect them.

However, Alibaba has yet to figure out a business model for the Muslim lifestyle market, even though there are many Muslim-majority countries and Muslims living in non-Muslim countries with similar (but larger) parallel external environments.

So, if “you (understand and) build it (right), they will come.” - Ambition

External environment: I think Alibaba is interested in three areas:

Alibaba's prospectus states that in China's "Internet mobile-macro consumption environment:

"China's real consumption in 2013 was 36.5% of GDP... The world's largest internet population with 618 million users as of December 31, 2013... 302 million online shoppers... Consumers are expanding the categories of products and services they purchase online, which will further increase online and mobile commerce activity... We believe that increased mobile device usage will make internet access more convenient, drive higher online shopper engagement and support new applications... With 500 million users, it is the world's largest mobile internet user base... and is expected to increase... The offline retail market faces significant challenges due to the lack of nationwide brick-and-mortar retailers, underdeveloped physical retail infrastructure, limited product selection and inconsistent product quality due to mobile usage..."

It can be said that the Muslim world also has a similar external environment. Therefore, is the current development of the $1.6 trillion Muslim consumer market equivalent to Alibaba's exploration of e-commerce in 1999?

Secondly, as again pointed out in the prospectus, network effects:

“The interaction between buyers and sellers creates a network effect where more merchants attract more consumers, and more consumers attract more merchants. In addition, our marketplaces are interconnected where many buyers and sellers in one marketplace also participate in the activities of our other marketplaces… further strengthening our ecosystem.”

Now, will the merchant effect apply to Muslim consumption? Yes, but it is a global B2B and national B2C and P2P approach.

Finally, the halal products and suppliers observed on the Alibaba website on September 12, 2014 were:

Total Halal products: 773,769

China: 755,343 products or 97%.

India: 6,552 products.

Pakistan: 159 products.

Malaysia: 885 products.

UAE: 193.

Therefore, the halal products on Alibaba's platform can be said to be a purely Chinese (97%). There are still some challenges in China regarding the integrity of the food supply chain, such as the recent scandal involving McDonald's and expired meat.

In China, according to the Malaysian website Halal Food Development Corporation (HDC), there are only three halal certification bodies. However, the influential Malaysian halal certification body, JAKIM, recently withdrew its accreditation in February 2014.

Furthermore, since only 885 products or 0.00000129% of halal products come from Malaysia, a global leader in halal certification, this seems to suggest that only a handful of Malaysian suppliers (39 see below) have the trust and confidence to be on the platform.

Query: Why are the remaining 4,400+ Halal SMEs from Malaysia not on the Alibaba platform, when it doesn’t cost them anything (unless they subscribe to a paid service)?

It can be said that halal food is something that links the Islamic finance space and is the “challenge of standards” or the “face of halal”, or issues that lead to negative perceptions of certification/standards providers.

The total number of Halal food suppliers was 2,071 on September 12, 2014, and 6,471 on September 10. However, on September 8, 2014, there were more than 10,000 Halal suppliers. But after a few weeks, why are there only 1,800 suppliers? (Reputation?)

China: 1,525 “Halal” suppliers, or 73%.

India: 94

Malaysia: 39

UAE: 10

There seems to be an integration gap between the certifying bodies and sellers of Halal products on Alibaba, among other issues.

in conclusion

The Muslim world is waiting for a "champion small and medium-sized enterprise...who believes the Internet will level the playing field by enabling small businesses to capitalize on innovation and technological development and compete more effectively in the domestic and global economies."

The World Islamic Economic Forum in Dubai has begun its quest for the championship.