Malaysia: Relatively huge untapped halal market in the region

By Daljit Dhesi, TheStaronline

THE huge relatively untapped halal market in the region, in which Malaysia is a major player and exporter, is a big business. Realising this growing market, more marketers are venturing or looking into the halal business to promote their brands amid strong demand for halal products locally and abroad.

Based on reports citing the Malaysian Investment Development Authority (Mida), Malaysia’s halal exports are expected to grow 19% to RM50bil this year from RM42bil in 2015. Last year, the country’s halal export grew 4.6% to RM39.41bil. Halal products not only comprise food business, although it forms the bulk of it, but also other consumer products.

Havas Worldwide Kuala Lumpur managing director Andrew Lee (pic) tells StarBizWeek the halal market-1 is huge. “Halal products, especially food not only appeals to the Muslims but also to the non-Muslims, It has advantage over other products due to its stringent quality control. We foresee over time more marketers will increase their advertising and promotion (A&P) budget in the halal segment. As launching any new products, huge effort and resources need to be invested to build meaningful connections with the consumers.

“The market is definitely bigger abroad. Local brands need to be ambitious and start looking at the potential outside Malaysia. Consumers are getting more demanding, not only do they want to know the ingredients of a product but also how it is made as well as the process it goes through and how the manufacturer’s quality control procedures.”

As for the challenges which marketers will have to face in penetrating the overseas halal market, Lee says that in non-Muslim markets, the products need to be marketed using stringent quality control and not marketed using religion. Any consumer will prefer a better quality product if the brand can successfully prove itself, he says, adding that halal products need not be marketed using religion as it will only limit their potential.

Vateran advertising practitioner Tony Savarimuthu, who will soon helm Dentsu LHS, agrees there is great potential in the global halal market. The current size of the global Muslim market in terms of expenditure is more than US$2 trillion and people who profess the Islamic faith is expected to reach two billion in 2030, he says.

He notes: “Halal is sometimes a misnomer to describe the expectations of this market. This market’s expectations are far more sophisticated than just having a tag associated with religious compliance alone. This is a simple minded view that may get marketers into trouble. This is not even a homogenous group to start with as Muslims are quite different in different parts of the world in terms of fashion sense, food and lifestyle.

“There are some key influences, however, in terms of motifs, design, ingredients, aromas and creative influences. The world of Islam is unified by the use of particular design motifs in branding and culture. If brands are tapping into the global market they need to take cognisance of this. Global Islamic brand design has the potential to deliver a powerful and meaningful design language to the world of commerce.’’

Mida chief executive officer Datuk Azman Mahmud was quoted by Bernama recently as saying that the halal industry was fast becoming an important source of revenue and growth, as attracting foreign direct investment in the halal products and services would help increase exports.

He added Malaysia had a strong foothold in the halal industry as it has a sound and comprehensive halal ecosystem as well as supply chain and had great potential to become a halal gateway to the global market.

Meanwhile, Omnicom Media Group Malaysia CEO Andreas Vogiatzakis feels as Malay consumers become more discerning, more internationalised, yet loyal to the Islamic practices, the need and demand for products that can satisfy the needs and wants of this consumer group for products that are halal certified becomes bigger. “In fact it is a natural evolution. Just like any other brand, it needs to be communicated to the target audience who are looking for halal certified products,’’ he says.