Estimates put the current global halal market at almost US$3 trillion. The industry is expected to grow to nearly US$8 trillion by 2030, driven by a growing Muslim population and the increased spending power of Muslim consumers. Much of this growth will also be driven by growing consumer awareness of halal benefits among both Muslims and non-Muslims.
No other major market segment offers this much potential in growth and global value. New opportunities have been identified in niche, high-growth areas, such as halal organics and halal ingredients, as well as the development of more innovative halal offerings that will benefit all consumer groups.
Promoting halal is also in line with environmental sustainability as the products must be sourced ethically and in the case of food, humane treatment of animals is required. In this way, the UN Global Compact’s Sustainable Development Goals have much in common with halal values. Recognising commonalities will benefit Muslims and the rest of the world, creating opportunities to work in synergistic harmony towards social and environmental causes.
With advances in artificial intelligence, Internet of Things, robotics and other areas, there are many opportunities to further operationalise halal requirements. Technology is helping to streamline compliance, improve monitoring and increase efficiency in oversight and integrity management throughout the supply chain.
Top halal talent (for which Malaysia is becoming a globally recognised source) presents new possibilities in the development of halal operating models, innovative products, self-enforcement mechanisms and greater assurance of halal integrity, from farm to fork.
Social media and online trading platforms are also being leveraged for halal business growth. Halal entrepreneurs are increasingly embracing online opportunities to promote their products and services directly to consumers while manufacturers and suppliers use online trading platforms to place their products within easy reach of global retailers.
As more businesses respond to consumer concern over whether their products or services are halal, ensuing growth in product acceptance will attract new investments in halal innovation. For example, sophisticated testing methods with precision equipment and innovative technology solutions will help make halal a mainstream factor in production, boosting confidence not only among consumers but also investors of companies with halal certification.
The next generation
Millennials are seeking eco-conscious products out of concern for the treatment of animals and for environmental sustainability. In this way, the millennial mindset is greatly compatible with the values of the halal industry. Millennials are also increasingly disrupting old paradigms and ways of doing business as more and more of them seek opportunities in the digital economy.
It is therefore necessary to ensure that there are opportunities for halal industry education and that universities offer halal-relevant courses to develop business leaders who are equipped to leverage opportunities in the halal market of the future. Some local universities have taken this matter seriously and are already offering halal programmes, from undergraduate to doctoral.
The growing field of data analytics will be critical to halal innovation and will underpin new approaches to understanding shariah and how it relates to halal-relevant fields in science, such as biotechnology. Other fields of study that will support the halal industry’s development are engineering, business, management, psychology and behavioural science. These disciplines can be applied in a variety of ways, from determining the halal factor in products and services to profiling customer preferences, and even assessing halal product potential among non-Muslim consumers.
Halal education programmes will be increasingly necessary as industry growth creates further demand for halal-skilled professionals. This demand could be fulfilled through a halal knowledge centre of excellence that provides continuing education and business professional training. By leveraging their existing knowledge, universities in Malaysia can further establish the country as a global hub for halal education, research and innovation.
Malaysia is well positioned to become a global leader in the halal industry. We already have a strong tradition of Islamic values, combined with a robust regulatory environment and halal industry ecosystem. More recently, Malaysia has made rapid advancements in technology and innovation, and there are many young entrepreneurs who are ready to develop new halal products, applications and services.
With this strong foundation already in place, Malaysia is ripe and ready to contribute to the world’s growing Islamic marketplace. For that to happen, it must seize the opportunity and leverage its strengths.
There are three things we can do: promote halal beyond traditional boundaries, apply new technology and innovation and prepare business leaders to meet future industry challenges.
We already have the success factors within our shores. Tapping this potential, however, will require some focused initiatives by key government agencies and the commitment of the community. By bringing these together, we can boldly move forward to the new frontier.
Mohd Husin Mohd Nor is a partner at Ernst & Young Advisory Services Sdn Bhd. The views in this article are his own and do not necessarily reflect the views of the global EY organisation or its member firms.