Industry News

JAKARTA: Many halal certification organizations have emerged around the world, such as JAKIM in Malaysia, a well-known government agency. Different entities check products and services according to their own standards and print their halal logo on the products.

Indonesia, a beautiful and growing country, is the most popular Muslim country in the world. The local brand Wardah specializes in halal products and is very popular among young women.

The company's advertising campaign, with its modern yet timeless style, features photos of Muslim models wearing headscarves and beaming smiles. Salespeople at Wardah Cosmetics counters all sport the turquoise headscarves, the brand's trademark color. "All women want to look beautiful," one salesperson says.

Wardah currently sells over 300 cosmetics products in 22,000 locations across Indonesia and Malaysia. When it was founded in 1995, Wardah was a small local brand. Its popularity skyrocketed, and it became the official sponsor of Indonesia's "99 Lights in the European Sky" in 2013, where the actresses wore the company's headscarves and products.

Since then, the company has maintained this momentum, launching television advertising campaigns and sponsoring fashion events to showcase Muslim-friendly clothing lines from young designers. Over the past decade, the company now enjoys annual revenue growth of nearly 50% and controls 5% of the domestic market share.

The company's impressive performance is surprisingly rapid, as it rapidly becomes a larger and larger player in the global halal food market, which is expected to exceed $1 trillion by 2015, according to a recent report by Deloitte Tohmatsu Consulting, with food accounting for 61% of global halal trade, pharmaceuticals 26%, and cosmetics 11%.

In countries with predominantly Muslim populations, even the non-food halal market, such as daily necessities and cosmetics, has flourished. Malaysia's JAKIM states that 70% of its halal certification applications come from the non-food sector. Halal standards, which are less stringent than those for food, have so far been applied to basic necessities. However, many consumers prefer halal-certified everyday products, not only because they provide assurance that they comply with Islamic law, but also because they consider certified products a safer and healthier choice.

International consumer brands have recognised this trend and are keen to tap into and develop the halal market. Alcohol-free products such as Johnson & Johnson shower gel and toothpaste from Anglo-Dutch giant Unilever have proven popular with consumers.

While established manufacturers have been quick to customize existing products for the halal market, new companies are developing innovative items that comply with Islamic rules and principles.

Zahara, a new company based in Singapore, has launched a nail polish product for Muslim women. Islam prays five times a day, and before each prayer, Muslims must wash their face, hands, and feet with clean water. For women, this includes removing nail polish. Because traditional nail polish is difficult to remove, it can be difficult for Muslim women to enjoy their beautiful nails while praying. To address this, Amira Geneid, herself a Muslim, came up with a water-soluble nail polish that's easy to remove before prayer. "I personally indulge in nail polish anytime of the day or night," she says.

Geneid's familiarity with Muslim customs gave her a crucial clue when starting her business. Her tech-savvy social media followings like Facebook and Instagram also helped her attract a younger demographic. She graduated from the National University of Singapore in 2014 and launched her business the following year.

As the halal market gains global attention, companies are also launching related products and services, such as logistics services and chemicals for food, cosmetics and other consumer products.

Nippon Express, one of Japan's largest logistics operators, announced that it has received Halal certification for its services from JAKIM in Malaysia. This certification certifies that the company can handle, store, and transport Halal products between Japan and Malaysia. To export products from Japan to Malaysia, the company must ensure that its entire logistics chain, including warehousing facilities and delivery trucks, complies with Islamic law. Nippon Express stated that increasing its international business and complying with Halal principles will drive its overseas expansion plans. Company officials stated that the certification will help Japan fill a missing link in its Halal supply chain.

Japan's Nippon Express is preparing to launch halal integrated logistics services in Malaysia.

"We have received many orders for exports from Japan to Malaysia," said Aliff Omar, a commercial sales representative at Nippon Express. "The main reason is the upcoming Olympics and the need to attract Muslims to Japan."

Chemical companies around the world are rushing to produce halal-certified chemicals. In 2010, a German chemical company in Malaysia began producing products using halal ingredients, including cosmetics and pigments.

Halal certification has expanded to other categories, and Ogawa, a major Japanese flavor manufacturer, established a halal factory in Indonesia in 2014. Although flavors for food account for 90% of the equipment's total output, demand for fragrances for non-food applications is also growing rapidly.

Companies are also seeing growing demand for halal services, including flights offering halal menus and travel agencies providing halal services to passengers with halal needs.

Islamic finance refers to financial products that comply with Halal regulations and is developing very rapidly.

The primary driver of the rapid growth of the halal market is the growing Muslim population. By 2050, Muslims are expected to account for 30% of the world's population, which means the halal market will continue to expand. As Muslim countries in most of Asia and Africa become increasingly affluent, the halal market will also become more profitable.

Halal products and services have gained immense appeal not only because they comply with Islamic law, but Halal certification has also become a symbol of safety, health and high quality.

Din Syamsuddin, former chairman of Indonesia's top Muslim body, MUI, told Nikkei that halal is an organic option in the 21st century, suggesting that both Muslim and non-Muslim consumers will help maintain growth in the global halal market for years, if not decades, to come.