What is Halal?

what-is-halal

Estimates suggest that the value of the global Halal market exceeds US$1 trillion. Experts taking into consideration the smaller local markets and industries determine the value to be approximately US$2.4 trillion. The consumers in this global market are nearly 3 billion. An important trend is that in many regional markets where the Muslim population is actually smaller, the individual purchase power of consumers is quite high.

The market covers all continents and all Muslim countries plus most countries with large Muslim population. The Muslim countries such as Malaysia which first adopted formal Halal certification gained momentum in the global trade. There are more non-Muslim countries, primarily in Asia and the Pacific region, which have focused on the production and export of Halal products.

The primary goods traded include meat, other types of foods ,food products and beverages. The share of other Halal products is smaller, approximately 40%, but the demand for them is growing strong as well. The other types of Halal goods traded internationally include cosmetics products, pharmaceutical products, textiles and clothing, leather and leather goods and leisure and hospitality services.

At present, the concept of Halal is seen as a major marketing tool. Each Halal product and service automatically gains the trust of Muslim consumers and this makes it much more competitive without the need for additional investment in marketing and advertising. In order for consumers to have complete confidence that the products which they are buying are truly Halal, standards and certification have been adopted.

Currently, there are only national standards and certification centres. In 2012, the Organisation of Islamic Cooperation (OIC) appointed UAE to produce unified Halal standards which would be applied in all 57 countries which are members of the organisation. It is expected that these standards will be set in place by the end of 2014.

Exporting to Islamic Countries

The Islamic countries around the globe have the largest national markets for Halal products exported from Dubai. Exporters will find the most abundant and most lucrative opportunities for trading there. The latest estimates are for the global Halal market to reach $10 trillion by 2030. Dubai has announced its plans to become a leader in the international Halal trade and has already taken the first steps towards achieving this position. The goal of Dubai Exports is to assist Dubai exporters with entering these markets and establishing solid positions and growth. This guide is designed to provide detailed information on the opportunities for exporting Halal products into Islamic countries and advice on how they can be exploited fully. It is suitable for all companies producing Halal products and looking for ways to trade them internationally. Companies in various sectors and of various sizes can exploit the available opportunities.

Technical Aspects

There are several technical requirements which a Dubai business must meet in order to be able to export Halal products to Islamic countries. The first one is to obtain Halal certification for its products. This certification confirms that the products meet the Halal standards established in UAE fully. The certificate enables the company to trade with all Islamic countries. The company’s products will be sold as Halal in the respective countries. The legal and financial requirements for exporting must be met by the business looking to trade its products in the global Halal market as well. These requirements have to be checked with Dubai Customs and with the customs authorities of the Islamic countries which the business plans to export Halal products to. Exporters should pay special attention to custom duties and how they will affect the price of their product.

Identifying National Markets for Exporting

Each one of the Islamic countries around the world has a market for Halal products. However, these markets are not created equal. This is the reason why Dubai exporters have to research and assess these countries and their respective markets to identify the best opportunities for trading their products. Consider the following list of criteria for identifying the most lucrative opportunities for Halal trading abroad: Market size – The number of Muslim people who want to purchase Halal products is an important factor for market assessment. Larger countries with higher population typically offer more opportunities for market entry and for growth. However, this does not mean that the focus of exporters should be on these countries only. The other criteria for identifying lucrative markets are equally important.

Market value – The market’s value is determined not only by the number of consumers in it, but by their income and expenditure on the respective Halal product. Often, smaller markets where the average consumer income is quite high offer better opportunities compared to those with more consumers who have very low average income. This correlation is applicable to the markets for all types of products from necessities like food to luxuries such as perfumes.

Competition – This is one of the major factors of foreign market assessments. Dubai exporters need to take into account the competition of both local and foreign Halal products of the same type. In some countries where Halal standards and certification have been present for several years now, there is much higher competition compared to countries where no formal Halal industry exists.

Trends – Dubai exports have to take into consideration the forecasts for the respective national Halal markets to ensure that they will have opportunities for growth which to exploit. Positive trends to search for include increasing national income and GDP, lower barriers to entering the national market, setting of higher quality standards and development of modern infrastructure. Negative trends include political instability, increasing unemployment and a regulatory system, which is becoming more complex.

Exporting costs – There are two types of costs which have to be considered when exporting products from Dubai to foreign Islamic countries. The custom duties and other taxes associated with exporting should be estimated and assessed carefully. The same applies to the cost of transportation. This cost depends on the type of exported product, the means for transportation used and the export volume.

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Working towards Halal and Islamic Food in the Philippines