Signs of wider ac­cep­tance

The Star Malaysia - Star2 - - Post Graduate - By IAN JEROME LEONG

MALAYSIA’S rich eth­nic di­ver­sity has not only ex­posed in­di­vid­u­als to ac­knowl­edge, ex­pe­ri­ence, un­der­stand and re­spect the cul­tures, cus­toms and tra­di­tions of the var­i­ous races and re­li­gions but, in it­self, rep­re­sents a unique cir­cum­stance that can lead to mar­ket­ing and com­mer­cial in­roads into a broad range of in­dus­tries.

Among them is the halal econ­omy. While many non-Mus­lims are fa­mil­iar with the term and of­ten see its em­blem printed on pack­aged food prod­ucts at the su­per­mar­ket or proudly dis­played at eater­ies, the truth of the mat­ter is that halal goods ex­tend be­yond food to in­clude cos­met­ics, medicine and cloth­ing.

Based on com­men­taries by in­ter­na­tional econ­o­mists, the ris­ing global pop­u­la­tion of Mus­lims and the de­mand for halal prod­ucts the world over, it is safe to con­clude that the halal in­dus­try is likely to grow and re­main on this up­ward trend for many years to come.

It is lit­tle won­der then that the New Eco­nomic Model and Halal In­dus­try Mas­ter Plan (HIMP) were launched as the in­dus­try is recog­nised as an im­por­tant eco­nomic driver for the coun­try.

With lu­cra­tive and ex­cit­ing op­por­tu­ni­ties un­fold­ing within the halal econ­omy, pro­fes­sion­als may want to con­sider tak­ing up halal-fo­cused cour­ses to not only up­grade their busi­ness acu­men but fa­mil­iarise them­selves with halal pro­ce­dures, norms and re­quire­ments.

Max­imis­ing the op­por­tu­nity

The big­gest draw fac­tor of the halal in­dus­try is the grow­ing in­ter­na­tional de­mand. The global Mus­lim pop­u­la­tion was recorded at 1.6 bil­lion in 2010 (roughly 25% of the to­tal pop­u­la­tion) and is ex­pected to rise to 2.8 bil­lion by 2050.

Even in Europe where Mus­lims are the mi­nor­ity, the gen­eral halal mar­ket is grow­ing at a rate of be­tween 10% and 20% an­nu­ally and coun­tries such as China, Ja­pan, the United States and Brazil are also show­ing in­ter­est in halal prod­ucts.

At the Amer­i­can Mus­lim Con­sumer Con­fer­ence in Oc­to­ber last year, it was an­nounced that the global syariah-com­pli­ant mar­ket gen­er­ates more than US$2 tril­lion (RM8.53 tril­lion) an­nu­ally, tak­ing into ac­count halal prod­ucts and ser­vices such as Is­lamic bank­ing.

The halal food mar­ket alone ac­counts for 16% of the global food in­dus­try and trans­lates to roughly US$632bil (RM2.69 tril­lion).

The no­tion that the halal in­dus­try is merely a niche mar­ket will not hold true in the fu­ture as the in­dus­try slowly creeps its way to be­com­ing main­stream.

Wide breadth of prod­ucts

Be­sides food, halal prod­ucts can also cover items such as cos­met­ics, skin­care prod­ucts, hair­care prod­ucts, phar­ma­ceu­ti­cals and cloth­ing.

The con­cern lies in the pro­duc­tion of sub­stances and ma­te­ri­als that may con­tain al­co­hol, an­i­mal fat, gela­tine or other an­i­mal residues that do not com­ply with syariah law.

In a global op­por­tu­nity anal­y­sis and in­dus­try forecast for 2014 to 2022 pub­lished by Al­lied Mar­ket Re­search, the global halal cos­metic mar­ket is ex­pected to reach US$54.16bil (RM230.85bil) by 2022.

Saudi Ara­bia, Iran, the United Arab Emi­rates, Malaysia and In­done­sia were high­lighted as po­ten­tial growth op­por­tu­ni­ties due to an in­creas­ing younger pop­u­la­tion, higher dis­pos­able in­come and ris­ing in­ter­est in fash­ion and makeup trends.

A re­port produced by Thom­son Reuters claims Mus­lim con­sumer spend­ing on cloth­ing in 2015 came up to US$243bil (RM1.035 tril­lion).

Fa­mous in­ter­na­tional fash­ion brands such as H&M, Uniqlo, DKNY and Dolce & Gab­bana have recog­nised the po­ten­tial of the mar­ket and have started sell­ing mod­est wear to at­tract the new mar­ket while Nike’s Pro Hi­jab range will hit stores next year.

The most promis­ing as­pect for prod­uct man­u­fac­tur­ers both large and small is that even though their prod­ucts are gen­er­ally aimed at Mus­lim end users, th­ese prod­ucts are per­fectly suitable for the wider mar­ket and there is noth­ing stop­ping peo­ple from pur­chas­ing th­ese items.

In ad­di­tion, as Mus­lim con­sumers will con­tinue to stick to brands with cred­i­bil­ity or prod­ucts that hold the nec­es­sary halal cer­ti­fi­ca­tion and ac­cred­i­ta­tion, food pro­duc­ers and prod­uct man­u­fac­tur­ers are as­sured of mar­ket se­cu­rity for many years to

Based on com­men­taries by in­ter­na­tional econ­o­mists, the ris­ing global pop­u­la­tion of Mus­lims and the de­mand for halal prod­ucts the world over, it is safe to con­clude that the halal in­dus­try is likely to grow and re­main on this up­ward trend for many years to come.

come should they con­form to the strin­gent and thor­ough halal qual­ity con­trol as­sess­ments.

Look­ing in­ter­na­tion­ally

In a CNN re­port late last year, neigh­bour­ing Brunei is mov­ing away from its oil and gas de­pen­dency and has started build­ing its in­ter­na­tional pres­ence as a halal pro­ducer.

Recog­nis­ing that it does not pos­sess am­ple land for large-scale an­i­mal agri­cul­ture, the Bruneian gov­ern­ment has ac­quired farms in Aus­tralia to not only pro­duce halal beef but cre­ate a big enough sup­ply that is ex­ported to the United King­dom and sold at su­per­mar­ket chains such as T es co and Asda.

For Malaysian pro­duc­ers, the key ben­e­fit is that the coun­try is al­ready seen as an in­ter­na­tional leader in the halal mar­ket­place, a bench­mark for halal cer­ti­fi­ca­tion and a ma­jor ex­porter of halal in­gre­di­ents, food and bev­er­age.

Not only is Malaysia a halal hub, it is also the or­gan­iser of the world’s largest halal trade event, the Malaysia In­ter­na­tional Halal Show­case, which at­tracts in­dus­try play­ers and halal ex­perts from around the world.

The Asia Is­lamic Fash­ion Week 2017 that was held in Kuala Lumpur at the end of March at­tracted fash­ion houses from France, the Nether­lands, South Africa as well as New York-based ELLE columnist and Haute Hi­jab chief ex­ec­u­tive of­fi­cer Me­lanie El­turk.

Com­pared to many in­ter­na­tional halal pro­duc­ers, Malaysian com­pa­nies are also at an ad­van­tage as a large por­tion of their tar­get mar­ket is right at their doorstep, elim­i­nat­ing long-dis­tance lo­gis­ti­cal prob­lems and cut­ting sup­ply costs.

There is also a good busi­ness ecosys­tem in­volv­ing the private sec­tor and the Gov­ern­ment, with lo­cal pro­duc­ers and man­u­fac­tur­ers re­ceiv­ing the train­ing, sup­port ser­vices and back­ing of agen­cies such as the Malaysian In­vest­ment De­vel­op­ment Au­thor­ity, In­ter­na­tional Trade and In­dus­try Min­istry, Malaysian Is­lamic De­vel­op­ment De­part­ment, Fi­nance Min­istry, Malaysia Pro­duc­tiv­ity Cor­po­ra­tion and SME Cor­po­ra­tion Malaysia.

This ex­per­tise is highly re­garded in­ter­na­tion­ally and the Halal In­dus­try De­vel­op­ment Cor­po­ra­tion (HDC), for one, is ex­port­ing knowl­edge to other coun­tries that seek guid­ance in set­ting up their own ha­lal­cer­ti­fi­ca­tion pro­cesses and frame­works.

Lim­it­ing the po­ten­tial

While Malaysia is on the right track, there is still much room for Malaysia to grow and this is where in­di­vid­u­als, in­clud­ing nonMus­lims, who deal in the re­lated busi­nesses should fa­mil­iarise them­selves or take up some cour­ses fo­cus­ing on the halal in­dus­try so that they may lead their or­gan­i­sa­tions in en­ter­ing this ex­cit­ing mar­ket.

In 2015, for­mer chief ex­ec­u­tive of­fi­cer of Malaysia Ex­ter­nal Trade De­vel­op­ment Cor­po­ra­tion Datuk Dzulk­i­fli Mah­mud said to The Star, “Most of the lo­cal pro­duc­ers of halal prod­ucts are small and medium en­ter­prises (SMEs), which lack the ca­pac­ity to meet the de­mand and sup­ply of the halal mar­ket glob­ally.

“This is why big cor­po­ra­tions and SMEs should join forces and cre­ate strate­gic col­lab­o­ra­tions.”

Among the three key per­for­mance in­dexes high­lighted in the HIMP that are to be achieved by 2020 is to have 1,600 SMEs listed as ac­tive halal ex­porters, but the cur­rent num­ber of com­pa­nies is only half of that as of Novem­ber last year.

Among the pos­si­ble sce­nar­ios is that smal­land medium-sized pro­duc­ers do not see them­selves as in­ter­na­tional play­ers or do not have the vi­sion to take their busi­nesses abroad.

Of­ten­times, smaller com­pa­nies shy away from the thought of go­ing in­ter­na­tional be­cause they be­lieve in ex­pand­ing in small steps or are daunted by the grand scale of in­ter­na­tional op­er­a­tions.

An­other pos­si­ble rea­son is that pro­pri­etors do not have the right qual­i­fi­ca­tions or busi­ness skills to be­come suc­cess­ful in the in­ter­na­tional halal mar­ket, even when the mar­ket is boom­ing.

There may also be com­pa­nies who have the labour, re­sources and suitable prod­ucts but do not know the pro­ce­dures and le­gal­i­ties in­volved in halal trade.

Pro­pel­ling change

It is for th­ese rea­sons that a halal-fo­cused post­grad­u­ate de­gree should be con­sid­ered. Sim­i­lar to how the cor­po­rate cir­cle would en­cour­age man­agers to seek post­grad­u­ate qual­i­fi­ca­tions such as an MBA or mas­ter’s in mar­ket­ing or in­ter­na­tional stud­ies so that man­agers can in­tro­duce new busi­ness mod­els and changes to grow a busi­ness, pro­pri­etors of halal prod­ucts should con­sider in­vest­ing their time and en­ergy in tak­ing up such cour­ses.

The end re­sults in­clude the broad­en­ing of busi­ness net­works, hav­ing a bet­ter grasp of key man­age­ment and en­trepreneur­ship con­cepts, fa­mil­iari­sa­tion with halal cer­ti­fi­ca­tion and na­tional halal reg­u­la­tions as well as an un­der­stand­ing of cross-bor­der le­gal­i­ties.

Pair­ing the knowl­edge of the halal in­dus­try with tra­di­tional busi­ness con­cepts, man­agers will be bet­ter pre­pared to not only in­tro­duce more suitable prod­ucts in the mar­ket but have a bet­ter idea of how to mar­ket their prod­ucts to ap­peal more to not only the halal mar­kets but the wider au­di­ence.

Fur­ther­more, it will help com­pa­nies recog­nise the strengths and weak­nesses of their busi­nesses, high­light­ing more rea­sons for them to part­ner with other com­pa­nies both lo­cally and abroad for a com­mon gain.

While in­ter­na­tional suc­cess sto­ries in the halal in­dus­try are few such as that of Brahim’s Hold­ings Ber­had that now pro­vides in-flight ca­ter­ing for a host of in­ter­na­tional air­lines, in­clud­ing Eti­had, Cathay Pa­cific, China Air­lines, Ja­pan Air­lines, Thai Air­ways and KLM, it is not out of reach for Malaysian busi­nesses and this should thus be the goal.

Malaysia has a good sup­port sys­tem for halal pro­pri­etors and the onus is now on them to equip them­selves with the right knowl­edge and take the bold step in match­ing the de­mands of the mar­ket that is al­ready wait­ing for them.

Strate­gic col­lab­o­ra­tions are a good way for com­pa­nies to make in­roads in an ex­cit­ing mar­ket.

Pro­pri­etors can reach new heights with the right ed­u­ca­tion, train­ing and in­dus­trial sup­port.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.