The Growth of the World Halal Cosmetic Market Murray Hunter University Malaysia PerlisAnother segment in the cosmetic industry that is growing rapidly and entering themainstream marketplace in Europe, the United States, the Middle East and Asia is the Halalproduct segment. Interest in Halal products has spread to cosmetics. Marketed Halalcosmetic products include hair and body care products, i.e., shampoos, conditioners, bathand shower gels, cleansers, creams, lotions, talc and baby powders, toners, make up,perfumes and Eau de colognes and oral care products. With world personal care andcosmetic sales estimated to be in excess of USD 300 Billion, sales of Halal personal care andcosmetic products are estimated to be USD 2.1 Billion in Saudi Arabia alone1. Although per-capita consumption rates are not as high in other “Islamic” market, i.e., 20-30% of theMalaysian market, less in other countries2, the total world market for Halal personal careand cosmetic products is in excess of USD 4 Billion and growing around 15% per annumaccording to the author’s own estimate. Halal or Islamic cosmetics are now available inmany places, including onboard sales on Saudi Airlines3, supermarkets (including Europe andUS), specialty Halal shops and widely through the internet. Some manufacturers haveintegrated the concepts of Halal, Organic and Fairtrade into their products in the Europeanmarket4.Given that one person in five is Muslin in the world and Muslims in Western countries arebecoming more aware of Islamic teachings, the Halal cosmetic market should continue tosolidly grow. The total certified halal market is currently estimated to be worth USD 400 Billion perannum 5. There are two major parts of the potential halal certified market, country markets wherethe Muslim population makes up the majority and country markets where Muslim consumers are aminority group. This represents around 20% of the World population. The major countries in thesetwo markets are shown in the next two tables6. Table 1. Markets Where the Islamic Population is the Dominant Group (Ranked by Muslim GDP at Purchasing Price Parity) Rank Country Total % Muslim Muslim Muslim GDP Per Population Population Population GDP USD Capita (PPP) USD (PPP) 1 Turkey 71,892,808 99% 71,173,879 879.12 B 12,900 2 Indonesia 237,512,352 88% 207,000,105 771.075 B 3,725 3 Iran 65,875,224 98% 64,557,719 737.94 10,624 4 Saudi Arabia 28,146,656 100% 28,146,656 564.6 B 23,243
5 Pakistan 172,800,048 97% 167,616,046 397.7 B 2,6006 Egypt 81,713,520 90% 73,542,168 363.6 B 5,5007 Algeria 33,769,668 99% 33,431,971 222.5 B 6,5008 Malaysia 25,274,132 60.4% 15,265,575 215.9 B 13,3169 Bangladesh 153,546,896 90% 138,192,206 186 B 1,30010 U.A.E. 4,621,399 96% 4,436,543 160.6 B 37,30011 Nigeria 146,255,312 50% 73,127,656 146.35 B 2,03512 Morocco 34,343,220 99% 33,999,787 124 B 4,10013 Kuwait 2,596,799 85% 2,207,279 110.5 B 39,30514 Albania 3,619,778 70% 2,533,845 13,94 B 6,30015 Iraq 28,221,180 97% 27,374,544 99.23 B 3,60016 Kazakhstan 15,340,533 57% 8,744,103 95.5 B 11,10017 Syria 19,747,586 90% 17,772,827 78.3 B 4,50018 Tunisia 10,383,577 98% 10,175,905 75.4 B 7,50019 Libya 6,173,579 97% 5,988,371 72.5 B 12,30020 Azerbaijan 8,177,717 95% 7,768,831 62.2 B 7,700 Table 2. Markets Where the Islamic Population is a Minority Group (Ranked by Muslim contribution to GDP at Purchasing Price Parity)Rank Country Total % Muslim Muslim Muslim GDP Per Population Population Population GDP USD Capita (PPP) USD (PPP)1 USA 303,824,640 3.5% 10,633,862 487 B 45,8002 India 1,147,995,904 13.4% 153,831,451 415.3 B 2,7003 Russia 140,702,096 10.5% 14,633,017 215.1 B 14,7004 China 1,330,044,544 3.0% 39,901,336 211.5 B 5,3005 France 64,057,792 7.5% 4,804,334 159.5 B 33,2006 Germany 82,369,552 3.7% 3,047,673 104.2 B 34,2007 Thailand 58,851,357 14.0% 8,239,190 65 B 7,9008 UK 60,943,912 2.7% 1,645,485 57.75 B 35,1009 Japan 125,449,703 1.0% 1,254,497 42.1 B 33,600
10 Italy 57,460,274 2.4% 1,379,047 41.92 B 30,400 11 Philippines 74,480,848 14.0% 10,427,319 35.4 B 3,400 12 Netherlands 15,568,034 5.4% 840,674 32.4 B 38,500 13 Singapore 3,396,121 17.0% 577,477 28.7 B 49,700 14 Canada 33,212,696 1.9% 631,041 24.2 B 38,400 15 Israel 5,421,995 14.0% 759,079 19.58 B 25,800 16 Spain 40,491,052 1.5% 607,365 18.3 B 30,100 17 Angola 10,366,031 25% 2,591,508 14.5 B 5,600 18 Austria 8,205,533 4.5% 369,248 14.2 B 38,400 19 Kenya 28,176,686 29.5% 8,312,122 14.13 B 1,700 20 Belgium 10,258,762 3.6% 369,315 13 B 35,300 21 Poland 38,633,912 2.0% 772,678 12.6 B 16,300 22 Hungary 10,106,017 6.0% 606,361 11.5 B 19,000 23 Australia 21,007,310 1.5% 315,109 11.4 B 36,300The markets shown in the Table 1. vary greatly in their stage of development and as a group arevery heterogeneous due to individual country tastes and preferences, although specific markets willtend to be homogeneous due to similar cultural, historical and social consumption traits. Marketslike Indonesia, Pakistan, Bangladesh, Nigeria, Iraq, Sudan, Uzbekistan, etc, have low per capitaincomes, where aggregate consumption of many consumer items would be very low, until somefurther development takes place. Some research also shows that approximately 20% of Muslimconsumers do not look for halal certifications when purchasing a product and that the majority ofconsumers will buy products that do not have the logo if there are no alternatives 7. More researchis required in this area.The top countries where the Muslim population is the minority are also potentially substantialmarkets for halal certified products, representing large market segment potentials (Table 2.). TheUS, Russia, China, France and Germany rank among the top group of Islamic economies with theiraggregate Islamic GDP figures. Recent reports indicate that halal sales in the US are increasingaround 80% per year, where a number of new retail outlets specializing in halal products areincreasing. A&P, Loblaws, Food Basics and Wal Mart are allocating space for halal products in theirstores 8. Many of the other countries down the list represent very small markets. However, inEurope and the Middle East per capita consumption of cosmetics is high 9. Possibilities exist thatsome countries may be potentially lucrative niches.Halal simply means what is permitted under Islam and is important to a Muslim’s life andspiritualism. The guiding laws of Islam are the Syar’iah. Central to the syar’iah are the concepts ofhalal and Toyyibaan, which govern all the economic activities of man in wealth production and
consumption of wealth, where certain means of gaining a livelihood are declared unlawful 10. Halalmeans lawful or permitted for Muslins11, a concept that is much wider than just food issues. Itconcerns whether operations and procedures are undertaken according to the syar’iah 12. Toyyibaanis a much wider concept, which means good, clean, wholesome, ethical in the Islamic concept. Innutrition, toyyibaan is a much wider concept than halal, as food must also be clean, safe, nutritious,healthy and balanced 13. Toyyibaan would also mean that agriculture must be undertaken withinsustainable practices 14, and in business, where things should be done with good intentions 15.Increasing globalism means that new product choices are available to consumers from companiesand service providers which they do not know and are yet to trust. Some surfactants are based ontallow based fatty acids, gelatine and use collagen are also animal based in productformulations, which may or may not have been slaughtered according to Islamic law. Amongmany Muslims this causes much uneasiness as they feel they are violating Islamic teachingsby wearing such products. Through advances in biotechnology, new ingredients are beingformulated into products. It is important to the majority of the Muslim community that some systemis in place to assure them that the products they purchase and consumer are lawful under Islam.There are a number of ingredients which Muslims cannot consume in any form, which include; a) Pork or pork by-products, b) Animals that are dead or dying prior to slaughter c) Blood and blood by-products d) Carnivorous animals e) Birds of Prey f) Land animals without external ears g) Alcohol, and h) Animals killed in the name of anything other than Allah (God).The Muslim living as a minority in a non-Islamic society will have a number of problems identifyingwhat items are halal and haram (forbidden in Islam), without product certification. For example,gelatine, lard and tallow can be either in a halal or non-halal, depending upon their source andmethod of processing. Cross contamination is a major problem in stores and particularly restaurants,where pork is also served. Therefore from the Muslim consumer standpoint; 1. Products must beproduced without any forbidden ingredients, 2. Products must be proved to be in the interests ofthe consumers’ health and wellbeing, 3. Products must be clean and hygienic, have supply chainintegrity16, 4. Products must benefit those who produced them, 5. Products must benefit thecommunity they came from17 and 6. Products and the materials that make up these products mustbe traceable from the origin, to have total confidence (as shown in Figure1.)18. The halal certificationsystem attempts to verify these issues.Methods of discovering “ Haram impurities” in products are rapidly improving with Thailand takingthe lead with their world class Halal Science centre at Culalongkorn University in Bangkokestablished in 199419. The centre focuses on developing standards, Haram ingredient detection forcertification purposes, production system development with a Halal-GMP/HACCP framework, andconsumer information services as well as research.
The Halal certification process involves; a) Halal accreditation should be done with an Islamic Association with a good international reputation, b) All processes must comply with requirements under the syar’iah c) All ingredients must be checked as to their suitability to be certified halal. All ingredients must be certified halal before the product can be certified halal d) Any haram (unlawful products) must be processed in separate facilities and never come into contact with halal certifiable products. e) Halal and products considered haram can never be stored together20. Haram (Those things prohibited by Traceable Allah in the Al Qu’ran) Sustainable HACCP environment, community & business Supply GMP Chain Community Benefit Toyyibaan Non-exploitive Ethical Healthy CleanFigure 1. The Concept of Halal in Relation to HACCP and GMP.Halal issues involved with cosmetics and personal care products are far from being totallyagreed upon and without sceptical criticisms. There are different schools of thought aboutwhether Islamic teachings prohibit alcohol use on the body outside oral consumption. Notall Muslims are in agreement over this as many of the blogs21 and comments at the end ofonline articles show22. Advertising and marketing methods are also leading to criticisms asthe photo below is ambiguous in what it is actually promoting to the consumer.
Figure 2. Strong Halal Cosmetic Competition in Malaysia with Many Philosophical andTechnical Issues to Resolve.Finally in wrapping up, this article was not meant to skim rather than canvass all the ethicaland religious issues concerning Halal cosmetics in detail. The intention of the author is topoint out that another new and potentially substantial market segment is growing andshould be taken seriously, if not for market positioning purposes, but for consideration iningredient selection and product certification.1 Kamarul Azman Kamaruzan, Halal Cosmetics: Between Real Concerns and Plain Ignorance, The Halal Journal,http://www.halaljournal.com/article/3375/halal-cosmetics:-between-real-concerns-and-plain-ignorance, th(accessed 25 September 2009).2 Dominique Patton, Could Halal Cosmetics be Developing into a New Global C&T Market?, Soap, Perfumery &Cosmetics, 28th May 2009, http://www.cosmeticsbusiness.com/story.asp?storyCode=3706, (accessed 25thSeptember 2009).3 http://www.alarabiya.net/articles/2009/09/12/84711.html4 http://www.saafpureskincare.com/5 Anas Ahmed Nasarudin, Strengthening Halal Food Supply Chain Through Technology: A case of Labuan asHalal distribution hub, in Proceedings of the World Food Shortage Conference, held at the PWTC, KualaLumpur, Malaysia, July 2008.6 Hunter, M., Essential Oils: Art, Agriculture, Science, Industry and Entrepreneurship: A Focus on the Asia-Pacific Region, New York, Nova, 2009.7 Othman, R., Mohd. Zaihani, S. H., and Ahmad, Z. A., Customers’ attitude towards halal food status: A surveyon Penang Muslim customers, in Proceedings of the 2nd National Conference on Entrepreneurship and SmallBusiness, Vistana Hotel, Penang, 9-10th December 2006.8 Burgmann, T., Growing Muslim Population pushing companies to produce products they can eat, The Toronto nd rdStar, 22 July, 2007, http://www.thestar.com/ business/article/238551, (accessed 23 July 2007)9 Rossi, E., Prlic, A., Hoffman, R., A Study of the European Cosmetic Industry, Executive Summary, EuropeanCommission, Directorate General for Enterprise and Industry, November 2007, sthttp://ec.europa.eu/enterprise/cosmetics/doc /exec_summ_cosmetics_2007.pdf, (accessed 1 October 2008)
10 Al-Qur’an (5:5), (2:168)11 Chaudry, M. S., Social and Moral Code of Islam, Batu Caves, Selangor, Malaysia, Masterpiece Publications,2006, P. 15.12 Halal-Haram Guide, Penang, Consumers Association of Penang, 2006, P. 17.13 Amin, M., Wisdom of the Prophet Muhammad, Lahore, Pakistan, Sh. Muhammad Ashraf, 1965.14 Abdullah, A., and Huda, N., ‘Nutrition Security in Muslim Countries: The Drive Towards a Healthy Ummah’ inSaifuddeen, S. M., Mohd. Salleh, S., and Sobian, A., Food and Technological Progress: An Islamic Perspective,Kuala Lumpur, MPH Publishing, 2006, P. 173.15 Al-Qur’an (7:58)16 Sungkar, I., Developing the halal value proposition from farm to folk, in proceedings of the 3rd MalaysianInternational Agro-Bio Business Conference, Kuala Lumpur, 12-13th July 2007.17 Hunter, M., An Islamic Business Model: A Tawhid Approach, SME-Entrepreneurship Global Conference 2008, 3 – 4th July 2008, Monash University, Australia18 Hunter, M., M . 2009. The Concept of HalalGAP as a means of Gaining Unfair Competitive Advantage, WorldFood Shortage Conference – Series II, 9-10th July 2009, Putra World trade centre (PWTC), Kuala Lumpur.19 http://www.halalscience.org/en/main/index.php20 Hazellah Abdul Rahman, Halal Agro-Industry Supply Chain, World Food Shortage Conference – SeriesII, 9-10th July 2009, Putra World trade centre (PWTC), Kuala Lumpur.21 For example: http://www.halalblog.com/2007/03/07/halal-organic-cosmetics-2/22 For example: http://www.alarabiya.net/articles/2009/09/12/84711.html