Analysis from global consultancy AT Kearney has found that the global halal market is set to exceed $2.5 trillion for the first time in 2020, and will continue to grow to hit $3 trillion in under five years.
The firm’s Global Business Policy Council, which conducted the analysis, found that spending on halal products and services is set to almost double globally by 2023. In 2012, the halal market accounted for $1.6 trillion of consumer spending worldwide and in 2017, made up 4.5% of global consumer spend at $2.1 trillion. With the market predicted to reach $3 trillion by 2023, it is growing at an exponential rate.
The halal market consists of products that are acceptable according to Islamic law, and align with Muslim culture and beliefs. Currently, the halal market comprises of six main sectors: food, travel, fashion, media and recreation, pharmaceuticals and cosmetics. Whilst food makes up the majority of the market currently at 62%, other areas such as fashion (13%) and media (10%) are growing as part of efforts to appeal to an increasingly diverse consumer base.
Whilst only making up 8% of the global halal market in 2017, the halal tourism sector is also set to increase as hotels and tour operators race to meet the dietary and religious needs of Muslim travellers. HalalBooking, a halal tourism firm, raised $2 million in a recent funding round, and is an early example of what’s to come in the travel sector.
The global halal market continues to be concentrated in countries with the largest Muslim populations, in particular Indonesia, which is set to become a global halal hub in 2020 in response to mandated halal labelling on consumer products in the region from October 2019.
That said, there will also be significant growth in major Western markets, particularly in the halal food sector. Haribo has already opened up a halal sweet shop in London and Mitsubishi Corporation has invested in the UAE’s Al Islami Foods, so further investment from multinational corporations is expected in 2020 and beyond.
Bahige El-Rayes, partner at AT Kearney, comments: “Muslims comprise almost a quarter of the world’s population and as a consumer group, form a significant proportion of the market. Businesses, particularly in the Western world, should take note of the clear opportunity to invest in halal products and services now, and take advantage of the rapidly growing market.”