As global demand for halal products surges, Vietnam is poised to capitalize on this lucrative market. The global halal food market is projected to reach $4.5 trillion by 2030, up from US$2.4 trillion in 2024, driven by a growing Muslim population and increasing consumer spending.
The Vietnam Halal Center has stated that the country has the potential to produce some US$34 billion worth of goods to the Organization of Islamic Cooperation (OIC) nations. In 2023, the combined GDP of OIC countries was estimated to be around $8.5 trillion, making them a considerable economic force.
With its diverse agricultural base and growing food processing industry, Vietnam can effectively meet the rising needs of halal consumers worldwide.
Halal certification is still in its infancy in Vietnam
While Vietnam has made strides in economic growth and industrial development, its halal certification infrastructure remains relatively underdeveloped compared to established halal hubs.
One of the primary challenges is the lack of a standardized and widely recognized halal certification system across the country. This issue arises from Vietnam’s predominantly non-Muslim population, which has historically limited the domestic demand for halal-certified products.
However, Vietnam did announce the establishment of the Vietnam Halal Certification Authority (HALCERT) in March 2024. HALCERT will be responsible for overseeing halal certification activities. It will also facilitate discussions, training, and international cooperation within the halal sector. This initiative is expected to streamline and standardize halal certification processes in Vietnam, ensuring compliance with international halal standards recognized by major halal-consuming countries. Currently, the country has some 50 companies that have received halal certification with their main products being seafood, beverages, and confectionery.
Vietnam’s halal export potential
Vietnam has huge potential to tap into the rapidly growing global halal food industry. The country is already among the top 20 food exporters in the world and the world’s 15 largest agricultural exporters. These include products such as pepper, cashew nuts, shrimp, pangasius, coffee, furniture, and rice. Agriculture is vital to Vietnam’s economy, making up around 11 percent of the country’s total GDP.
Several Vietnamese companies have already made successful entries into the halal market. For example, Minh Phu Seafood Corporation, one of the largest shrimp producers, has seen significant growth in its exports to Muslim-majority countries after obtaining halal certification. Similarly, Vinamilk, the largest dairy company in Vietnam, has expanded its product range to include halal-certified products, opening up new markets in the Middle East and Southeast Asia.
The country is seeking to collaborate with international halal certification bodies and OIC countries to ensure its halal products meet global standards. For example, recent agreements with Malaysian and Indonesian halal authorities aim to create mutual recognition of certification standards, enhancing market access.
Establishing a foothold in Indonesia will be crucial
Vietnam’s geographical proximity to Indonesia, a major halal market with the world’s largest Muslim population, positions it strategically to enhance and expedite its halal export operations to Southeast Asia.
The halal market in Indonesia spans various sectors, including food and beverages, cosmetics, pharmaceuticals, fashion, and tourism. The halal food industry is a significant component of Indonesia’s economy, driven by both domestic demand and export opportunities. Before the pandemic, global spending on halal products reached over US$2 trillion with Indonesian consumers spending some 10 percent or over US$200 billion on Halal products and services.
In entering the Indonesian halal market, Vietnamese businesses must understand the country’s latest halal product regulations. In a significant move, the Indonesian government introduced Government Regulation 39 of 2021 (“Halal Certification Regulation”) on implementing Halal Product Assurance, mandating Halal certification for a wide range of goods and services.
In addition to the food and beverage industry, this regulatory framework also encompasses consumables sectors, such as cosmetics, drugs, medical supplies and devices, clothing, office supplies, and household appliances – including their ancillary businesses. To comply with this regulation, each product classification must obtain Halal certification within the stipulated timeframe, from October 2024 to October 2034.
Conclusion
With the establishment of HALCERT and a focus on meeting international halal standards, Vietnam is well-positioned to expand its presence in the global halal market. By leveraging its diverse agricultural resources, advancing its food processing industry, and enhancing certification processes, Vietnam can unlock substantial economic opportunities, drive growth, and strengthen its global trade footprint.
