May-June . 2022 | @ Halal
Industry
05
Global halal trade opportunities
The ever-growing halal market stands for great trade opportunities for Malaysian players
BY KHIRTINI KUMARAN
ACCORDING TO Pew Research Center projections , the world ’ s Muslim population is expected to be 2.2 billion by 2030 , with the Asia Pacific dominating at 59.2 per cent . Expectedly , the demand for halal-certified products and services is also growing with the rapid population rise . Concurrently , there are tremendous opportunities for halal products and services export market .
The Selangor International Halal Convention ( SELHAC ) featured a panel discussion on ‘ Exploring International Market Opportunities and Smart Collaboration in Halal Trades ’
Panellists include ; Remee Yaakub , the Director of Halal F & B and Agro-Based Section , Export Promotion and Market Access Division from Malaysia External Trade Development Corporation ( MATRADE ); Alan Hoo , Executive Director of Nusantara-Sino Global Holdings ( NSGH ); and Zafer Soylu , Chairman of the Turkish Halal Accreditation Agency ( HAK ).
Abdul Mohsein Mohd Shariff , the Deputy President of the Malaysian Islamic Chamber of Commerce , moderated the panel discussion .
Supporting Malaysian exporters and entrepreneurs
MATRADE , as the national trade promotion agency , is actively committed to supporting local exporters and entrepreneurs , especially in the halal sector .
Remme explained : “ MATRADE serves its stakeholders , companies , and entrepreneurs within its four core functions ; export promotion , exporters development , trade and market information , and trade advisory and support .
“ Our services and resources are readily available for those interested in venturing into trading businesses .”
He also noted that it is vital for businesses to establish themselves on online platforms with rapid digitalisation , as brick and mortar outlets may not be sufficient .
“ In 2021 , we expanded MATRADE ’ s scope to cover the cost for companies to undertake digital marketing training .”
Regarding the halal market , MATRADE spearheads the effort to the internationalisation of Malaysian halal products and services .
“ In line with the effort , we have been organising the Malaysia International Halal Showcase ( MIHAS ) event since 2004 . Along with local participants , we also bring in international investors and buyers to participate in business meeting sessions .
“ MIHAS is a cost-effective event that allows our local companies and entrepreneurs to tap into international trading opportunities to participate in the event .”
Halal market competition and opportunities
According to Hoo , the NSGH team has an in-depth understanding of international markets through
( From left to right ) Remme Yaakub , Abdul Mohsein Mohd Shariff , Alan Hoo
extensive involvement in trade , running businesses , establishing networks , and trade financing .
“ We ’ ve been approached by countries such as Vietnam , Cambodia , Thailand and Singapore to work on the halal economy ,” said Hoo .
“ Malaysia , as an Islamic country , is the leader in halal economy , and if we are not careful , it will be overtaken by these nations .
“ When we look at the trade industry as a whole , the Malaysian government , as an enabler , has everything in place regarding regulations , funding , and grants .”
He stressed the private sectors , companies and entrepreneurs need to move , be brave and utilise the resources available to explore beyond the Malaysian domestic market .
The Regional Comprehensive Economic Partnership ( RCEP ) is a Free Trade Agreement ( FTA ) between the 10 member states of the Association of Southeast Asian Nations and its five FTA partners ( Australia , China , Japan , New Zealand and the Republic of Korea ).
“ Opportunities are tremendous because this is the first time we can get into countries like Australia , New Zealand , Korea , Japan , and China , with open doors .
“ We have initiated halal economy deals with China . We are currently working with the China government to set up a world halal economy hub , where we will invite Malaysia and other countries to set up their businesses . It will be a one-stop centre , branded as the food , culinary and culture pavilion ,” added Hoo .
Establishing a global halal certification system
While it is agreed that there is tremendous trade potential in the global halal market , there is still a barrier in terms of certification and standards .
Different countries with Muslim markets have different requirements and standards , resulting in one product being subjected to more than one halal certification process , leading to additional cost , time , and labour .
“ We should establish a globally recognised halal certification system and establish a common accreditation mechanism for multilateral recognition of halal certificates and certification bodies ,” he said .
The Standards and Metrology Institute for Islamic Countries ( SMIIC ), an affiliated body of the Organisation of Islamic Cooperation ( OIC ), aims to set new standards in the Member States and eliminate technical trade barriers , consequently increasing the trade among them .
In line with SMIIC standards , the HAK , as the only authorised institution to accredit halal conformity assessment bodies in Turkey , has made significant progress in establishing a reliable certification system in the halal field .
“ Apart from food and beverages , we also serve accreditation in cosmetics , tourism laboratory , and personal certification .
“ We are the only authority in our country that gives accreditation status to halal certification bodies both in Turkey and abroad .
Zafer Soylu joining virtually from Turkey
( From Left ) Leonard Ariff Abdul Shatar , Ameer Ali Vali Mohamed , Othman Md . Yusoff . ( Right panel ) Dr Mohamed Ali
Penetrating the halal export market
THE GLOBAL halal market is one of the fastest-growing markets , in line with its fastest-growing consumer segment globally . According to Halal Development Corporation Berhad ( HDC ), the global halal market is projected to reach US $ 3 trillion by 2024 and grow to US $ 5 trillion by 2030 .
Against this backdrop , exporters gain greater opportunities and profit if they successfully penetrate the global halal market , afflicted with challenges such as trade regulations and a lack of a harmonised halal certification system .
The Selangor International Halal Convention ’ s ( SELHAC ) final panel session , ‘ Global Halal Market Size to Reach $ 5 Trillion by 2030 : How to Penetrate & Succeed in the Local & Global Market ?’ discussed market penetration strategies , foreign market regulation and halal requirements .
Moderated by Halal International Selangor ( HIS ) General Manager Ameer Ali Vali Mohamed , the panel session featured Othman Md . Yusoff ( Head of Halal Affairs Department from Nestle Malaysia ), Leonard Ariff Abdul Shatar ( Group Managing Director of Duopharma Biotech Berhad ) and Dr Mohamed Ali ( Partner at DinarStandard UAE ).
Strategy to penetrate new markets
Joining the panel virtually , Dr Mohamed Ali shared the strategy for successful penetration into new markets .
“ Whether it ’ s for a halal or non-halal product , the strategy is the same . Essentially , we need to understand three main factors ; competition , consumer preference , and the market size .
Firstly assess the competition in the market . Dr Mohamad Ali said : “ Exporters need to understand the structure of the foreign market they wish to penetrate . They need to identify the main players , known brands , price positioning , etc .”
“ Next is what the customers ’ preferences in the market are . Exporters need to identify consumers ’ preferences and demands , whether in terms of the packaging , taste , quality or price .
“ There are opportunities for Malaysian exporters in OIC countries market as there is customer preference for Malaysian products and goods .
“ Final factor is the size of the market . If the market is big enough , perhaps the best way to penetrate the market is through investment or joint venture instead of distribution . You will be able to control the market , your brand and pricing .”
Foreign market regulations and halal requirements
Exporters need to know and understand each country ’ s regulations and requirements before embarking on trading business as exports of their particular goods and products may be subjected to restrictions , said Othman
“ When it comes to exporting , it is important to fulfil the receiving country ’ s regulations ,” he stressed .
Leonard , agreeing with Othman , said : “ Firstly , put aside branding , marketing , etc . The starting point has to be whether you can sell the product legally in the country and whether you can legally sell halal products .
“ If you choose to use halal as a platform to differentiate yourself in your exports , understand that there is a lack of harmonisation of the halal certification system and the terms and definition of halal in different countries .”
“ There are many countries that have mutual recognition agreements with Malaysia that will recognise the Department of Islamic Development Malaysia ’ s ( JAKIM ) logo as certification that the product is halal , but not all countries .
“ So when you go with JAKIM certification on your product , understand it will not necessarily be globally recognised .”
Hence , he stressed the importance of exporters first focusing on the product before fulfilling halal requirements to ensure they have the broadest possible market .
“ There is no point to excluding specific markets because it ’ s non-halal . Know that the demand for halal products is latent . We don ’ t have to create it as it is building on itself . What you are providing now is a choice .
“ So , when you are developing a product , make sure to consider that about 40 per cent of the population would want the ability to choose halal products .”