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State of the global islamic economy 2020 21 report - english executive summary
- 1. FINANCE > FOOD > FASHION > TRAVEL > MEDIA AND RECREATION PHARMACEUTICALS > COSMETICS State of the Global Islamic Economy Report 2020/21 THRIVING IN UNCERTAINTY PRODUCED BY: IN PARTNERSHIP WITH: SUPPORTED BY:
- 3. In a year that will go down in history, the COVID-19 pandemic set off an unprecedented chain reaction of global economic disruption. Businesses, investors, and governments across the global and Islamic economy found themselves embroiled in a financial crisis. Some used this disruption to pivot, while some businesses flourished. This eighth edition of the State of the Global Islamic Economy Report covers developments over this landmark year — pre- and post-COVID-19. Thisyear’sreportestimatesthatMuslimsspent$2.02 trillionin2019acrossthefood,pharmaceutical,cosmetics, fashion,travelandmedia/recreationsectors,allofwhich areimpactedbyIslamicfaith-inspiredethicalconsumption needs.Thisspendingreflectsa3.2%year-on-yeargrowth from2018.Inaddition,Islamicfinanceassetswereesti- matedtohavereached$2.88trillionin2019.Thepandemic isforecastedtoresultinan8%decreaseinglobalMuslim spendingin2020fortheIslamiceconomysectors coveredinthisreport.Allofthesesectors,excepttravel, areexpectedtoreturntopre-pandemicspendlevelsby theendof2021.Muslimspendisforecastedtoreach $2.4trillionby2024ata5-yearCumulativeAnnual GrowthRate(CAGR)of3.1%. DespitethehavocwreakedbyCOVID-19,thepastyearsaw manynotabledevelopmentsintheIslamiceconomy— ledbyanaccelerationindigitaltransformation,disruption inglobalsupplychains,andincreasedgovernment focusonfoodsecurity-relatedinvestments.Theglobal Islamiceconomycontinuestobeunderpinnedbyeight keydrivers,includingalargeandgrowingMuslim population,anincreasingadherencetoIslamicethical valuesimpactingconsumption,andagrowingnumberof nationalstrategiesdedicatedtohalalproductsandservice development. CountriescontinuetobuildmorerobustIslamiceconomy ecosystems.MalaysiacurrentlyleadstheoverallGlobal IslamicEconomyIndicator(GIEI)rankingsfortheeighth consecutiveyear,whileSaudiArabiamoveduptosecond place,followedbytheUAEandIndonesia.Newentrants tothetop15includeNigeria(#13),SriLanka(#14),and Singapore(#15).Brunei,Sudan,andBangladeshhavefallen outofthetop15. SeveralnationalIslamiceconomystrategieswere launchedlastyear,mostnotablyIndonesia’smandatory halallaw,whichcameintoforceforhalalfoodproducts. SaudiArabiaalsolaunchedanationalregulationsystem forhalalproductsduringthesamemonth.Indonesiaand thePhilippinesformedstrategicpartnershipstoexpand theirhalaltrade,asdidJapanandMalaysia.IntheIslamic financesector,Pakistan,Qatar,andKuwaitannounced plansfornewcentralizedregulations.Despitethehitto thetourismsector,SaudiArabiaremainsinvestedinits Vision2030strategyandisplanningtolauncha$4billion tourismfundfocusedontraveltechnologyandsupporting mixed-usedestinations. COVID-19relateddisruptionshaveforcedtheheavily import-dependent57memberOrganizationofIslamic Cooperation(OIC)countriestoprioritizefoodsecurity, withboththeUAEandSaudiArabialaunchingextensive programstostrengthenself-sufficiency.SaudiArabiaand Indonesiaarealsopushingforthelocalmanufacturingof pharmaceuticals.TheGlobalReportonFoodCriseshas estimatedthatCOVID-19willresultinadoublingofthe currentleveloffoodinsecurity,with265millionpeopleon thebrinkofstarvationglobally,manyofwhomarefrom OICcountries.TheIslamicDevelopmentBank(IsDB) respondedbylaunchinga$2.3billionfinancialaidpackage tosupport27membercountriesincontainingCOVID-19. TheSocialImpactsectionintroducedlastyearcontinues torecognizebusinessesandorganizationsthataretaking stepstowardstheUnitedNations(UN)Sustainable DevelopmentGoals(SDGs)for2030.Ayearclosertothe 2030deadline,theindustryhasmadesomeprogress —forexample,BIMBInvestmentManagementBerhad, awholly-ownedsubsidiaryofBankIslamMalaysia Berhad,launcheditsfirstRobo-IntelligenceSustainable Shariah-ESGinvestingonlineplatform—butthereisstill alongwaytogo. InvestmentsintheIslamicEconomyfelldrasticallyas COVID-19spreadacrosstheworld.Thisyear’sreport expandeditsinvestmentanalysislenstotrackmerger/ acquisitions(M&A),privateequity,andventurecapital transactionsacrossthebroaderIslamicEconomymarkets. InvestmentsinIslamiceconomy-relevantsectorsacross OICandselectnon-OICmarketsfellby13%to$11.8billion in2019/20from$13.6billionin2018/19.Indonesia,Malaysia, andtheUAEsawthehighestnumberofinvestments,with Indonesiabagging25%ofalldealsrecorded.Intermsof sectors,halalfoodandIslamicfinancecomprised 52%and42%ofthetotaldealvalue,respectively. Executive Summary 1 EXECUTIVE SUMMARY STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 4. STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 EXECUTIVE SUMMARY 2
- 6. 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 -10 -8 -6 -4 -2 2 0 6 4 8 10 COVID-19 Impact Projections Projected 5-year CAGR of 3.1% (2019-2024) to reach $2.4 trillion by 2024 -70% -70% 3.20 3.20 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 -3.7% -3.7% -2.9% -2.9% -2.5% -2.5% -0.2% -0.2% Worst hit sectors by COVID-19 Travel worst hit, while Food fares the best -6.9% -6.9% The Global Islamic Economy 2018-24 CAGR GROWTH % PROJECTION PRE-COVID19 POST-COVID19 6.2% 3.1% (% YOY GROWTH, 2018-24)* (2019-20 EST. GROWTH) Global Muslim spend on halal products & lifestyle sectors $2.88 trillion of Islamic finance assets (2019 est.) Represented by $2.02 trillion of consumer spending by 1.9 billion Muslims across six real-economy sectors (2019 est.) + + Islamic Finance ( A s s e t s ) $2.88trillion / $ 3 . 6 9 t r i l l i o n 5% Halal food $1.17trillion / $ 1 . 3 8 t r i l l i o n 3.5% 0 -10 -20 -30 -40 -70 -60 -50 2019/2024 Media& recreation $222billion /$270billion 3.9% Modest fashion $277billion /$311billion 2.4% C o s m e t i c s $ 6 6 b n /$76bn 2.9% P h a r m a $ 9 4 b i l l i o n /$105billion 2.3% M u s l i m - f r i e n d l y t r a v e l $ 1 9 4 b i l l i o n /$208billion 1.4% CAGR forecast to 2024 CAGR forecast to 2024 0 1 2 3 4 5% 0 1 2 3 4 5%
- 7. $11.8 billion investments in 2019/20* -13% growth YOY Global FDI*: down by up to 40% in 2020; further decrease by 5-10% in 2021; begin to recover in 2022 However, Islamic economies with $3.2 trillion (2019) in sovereign wealth fund assets are enabling food security investments (KSA, UAE, Qatar) KEY INVESTOR CATEGORIES OUTLOOK All estimates by DinarStandard Research & Advisory except for Islamic Finance sector provided by ICD-Refinitiv Islamic Finance Development Indicator 2020 data. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank’s ICP 2017 consumer data as baseline reference. Projections baselined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. FDI figures based on UNCTAD 2019 data. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. 51.86% Halal Food 54% Venture Capital 40% Mergers & Acquisitions S Si ig gn na al ls s O Of f O Op pp po or rt tu un ni it ti ie es s Amidst the pandemic, multiple strong and Amidst the pandemic, multiple strong and weak signals of opportunities are emerging weak signals of opportunities are emerging ISLAMIC FINANCE H A L A L P R O D U C T S H A L A L L I F E S T Y L E Tokenization Tokenization of sukuks of sukuks Banks’ digitization Banks’ digitization Supply chain Supply chain global shifts global shifts Domestic Domestic tourism boost tourism boost Contextualized Contextualized online games online games Food Food security focus security focus Halal cloud- Halal cloud- kitchens kitchens G Go ov ve er rn nm me en nt t B Be en nc ch hm ma ar rk ks s A comprehensive index of 81 countries in the Islamic economy A comprehensive index of 81 countries in the Islamic economy ecosystem relative to their size. ecosystem relative to their size. (See chapter for detail) (See chapter for detail) Investments Despite depressed global FDI, government-led investments are driving activity FINANCE H A L A L F O O D R E C R E A T I O N T R A V E L F A S H I O N PHARMA & COSMETICS 1 1 10 10 20 20 30 30 40 40 2. Saudi Arabia 1. Malaysia 3. UAE 4. Indonesia 5. Jordan GLOBAL ISLAMIC ECONOMY INDICATOR RANKING 1 1 10 10 20 20 30 30 40 40 41.8% Islamic Finance 2.89% Travel & tourism 1.06% Halal Cosmetics 1.33% Halal Pharma 1.06% Other 6% Private Equity Small impact Big impact Weak signal Strong signal
- 8. Halal Food STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 6 HALAL FOOD
- 9. TheCOVID-19pandemichasprovedtobechallengingfor globalfoodproductionanddistribution,andthehalalfood sectorisnoexception.Indeed,threeoutofthefivelargest foodexporterstotheOICcountries–Brazil,Indiaand Turkey–wereseverelyimpacted. Changesinconsumerbehavioraffectedoff-the-shelfsales inbothpositiveandnegativeways,withmoredemand forparticularfoodsoverothers.COVID-19drivenmeat shortages,forexample,ledtoagreaterdemandforalter- nativeproteins. AmoresubduedRamadanthisyearduetostay-at-home restrictionscausedadropinretailsales,withrevenues atcasualandfinediningrestaurantsdroppingbyasmuch as85%worldwideattheheightofthepandemic. Ontheotherhand,homedeliveriesspiked,withoutlets suchastheUSA’sTheHalalGuysmakingparticularuse ofcloudkitchens,agrowingtrendthatwasgivenamajor pushin2020.InFebruary,Emiraticloudkitchenplatform Kitopiraised$60millioninseriesBfunding. Unsurprisingly,therewasaflurryofinvestment infoodrelatedappsduringthepandemic,from the$36millionraisedforSaudiArabiandelivery startupJahez,toacommission-freefood orderingwebsite,DeliverDXB,launched inDubai. Investmentintoproducersalsocontinued despiteCOVID-19.SharesinPakistan’sThe OrganicMeatCompany’sIPOwereoversub- scribedby1.7times,whileAjinomoto,aJapanese seasoningcompany,invested$85million inahalalproductionlineinMalaysia. Theingredientssectorisalsoattracting attention,withSymrise,aGermanflavors producer,openingacreativitycenterinEgypt todevelopcustomizedproductsfortheMiddle EastandAfricamarkets.Oneofthebiggest developmentsis$300millionbeinginvestedin MalaysiaandASEAN’sfirsthalalgelatinplant andindustrialpark,bythelocalsubsidiaryof Japan’sSanichiTechnology. Halaltradehasexpanded,withmultipleagree- mentsinkedwithkeyfoodproducers,and non-OICcountriespartneringwithMuslim- majoritycountries,suchasBrazilandtheUAE, totaptheburgeoninghalalmarket. Therehavealsobeensolidmovesinimproving halalstandards,notablytheOIC’sStandardsand MetrologyInstituteforIslamicCountries(SMIIC) producingfivenewHalalstandards,includingoneforfood additivesandfourrelatedtoconformityassessment. Withthedemandfortraceability–fromfarmtofork–on therise,andmorecustomersseekingouthalalcertified products,thehalalfoodsectorissettocontinuebeingthe driveroftheIslamiceconomy. Muslim spend on food increased by 3.1% in 2019 to $1.17 trillion from $1.13 trillion in 2018. The COVID-19 crisis is not expected to result in a significant drop in Muslim spend for 2020, with a drop of 0.2% forecasted. A CAGR of 3.5% is expected between 2019 and 2024, with Muslim spend expected to reach $1.38 trillion by 2024. 7 HALAL FOOD STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 10. 1. Brazil 1. Brazil $16.2 billion $16.2 billion 3. USA 3. USA $13.8 billion $13.8 billion 5. Argentina 5. Argentina $10.2 billion $10.2 billion 1. Brazil 1. Brazil $16.2 billion $16.2 billion 3. USA 3. USA $13.8 billion $13.8 billion 5. Argentina 5. Argentina $10.2 billion $10.2 billion -10 -8 -6 -4 -2 2 0 6 4 8 10 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 $200 billion of Food and Beverage exports to OIC* countries (2019) All estimates by DinarStandard Research & Advisory. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank’s ICP 2017 consumer data as baseline reference. Projections base-lined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Halal food 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 6.3% 3.4% 3.2 3.2 -0.2 -0.2 5.8 5.8 3.7 3.7 4 4 4.1 4.1 All products/sectors Halal food Investments Investments Despite depressed global FDI, sovereign wealth fund led food security and supply-chain investments are rebuilding momentum $6.11 billion in halal-related food industry investments 2019/20* 16 Malaysia 27 Others 10 Indonesia 8 UAE Indonesia: Indofood’s $2.9 billion acquisition of Indomie noodles MENA market manufacturer Pinehill Europe: PE firm Perwyn backed French halal products leader Isla Delice acquired Belgium’s Hoca Meats DEALS Top countries with # of related deals COVID-19 Impact Projections Projected 5-year CAGR of 3.5% (2019/24) reaching $1.38 trillion by 2024 Global Muslim spend on food versus all halal products & lifestyle sectors The thickness of the lines is proportional to the value of the country’s exports Top 5 halal food consumer markets (2019) Top 5 countries exporting to OIC (2019) (% YOY GROWTH, 2018/24)* 61 TOTAL Represented by $1.17 trillion of spending by 1.9 billion Muslims on food & beverage. (2019 est.)
- 11. 2. India 2. India $14.4 billion $14.4 billion 4. Russia 4. Russia $11.9 billion $11.9 billion 1 Indonesia Indonesia $144 billion $144 billion 2 Bangladesh Bangladesh $107 billion $107 billion 5 Pakistan Pakistan $82 billion $82 billion 3 Egypt Egypt $95 billion $95 billion 4 Nigeria Nigeria $83 billion $83 billion 2. India 2. India $14.4 billion $14.4 billion 4. Russia 4. Russia $11.9 billion $11.9 billion 1 Indonesia Indonesia $144 billion $144 billion 2 Bangladesh Bangladesh $107 billion $107 billion 5 Pakistan Pakistan $82 billion $82 billion 3 Egypt Egypt $95 billion $95 billion 4 Nigeria Nigeria $83 billion $83 billion Government Benchmarks 2. Singapore 1. Malaysia 3. UAE 4. Indonesia 5. Turkey FINANCIAL GOVERNANCE SOCIAL AWARENESS 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 HALAL FOOD - GIE INDICATOR RANKING (2019) GOVERNMENT BUSINESS/INVESTMENT Food security Food security focus focus Supply chain Supply chain global shifts global shifts Health-focused and Health-focused and functional foods functional foods Halal cloud- Halal cloud- kitchens kitchens Ready-to-Eat/Ready- Ready-to-Eat/Ready- to-Cook segment to-Cook segment Blockchain/IoT Blockchain/IoT enabled traceability enabled traceability Stringent halal Stringent halal regulations regulations Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 12. Islamic Finance STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 10 ISLAMIC FINANCE
- 13. TheCOVID-19pandemichaltedthegrowthoftheIslamic Financesectorthisyearbutstimulatedthedevelopment ofmoreinclusiveandsociallydrivenfinance,whether throughcrowdfunding,public-privatepartnerships,or supportforSMEs. Thepandemicdelayedmergersandacquisitions,suchas KuwaitFinanceHouse’smergerwithBahrain’sAhliUnited BankandNationalCommercialBank’smergerwithSamba FinancialinSaudiArabia. PriortoCOVID-19,therewasawaveofinvest- ments,mergers,andthelaunchofnewfinancial platforms.Forexample,theUAE’sDubaiIslamic Bank(DIB)acquiredNoorBanktobecomeone ofthelargestIslamicbanksintheworld.Inthe UK,anIslamicfintechbankingapp,Niyah,was released,andaShariah-compliantchallenger bank,Rizq,waslaunched.P2Pcrowdfunding platformshavealsobeenestablishedand expandedfromtheUKtoMalaysia. Thetakaful(insurance)sectorhasalso developedrapidly,withseveralmergersand acquisitions,particularlyintheGulfand Indonesia. Governments,especiallyinOICcountries, havebeenkeentobolsterIslamicfinance,and thispastyearhasseenmanyinitiativesand measurestodrivethesectorforward,from issuingIslamicbankinglicensestoamending regulations.NewIslamicbanksarealsoset tobeestablishedinTajikistan,Uganda,and thePhilippines,anddigitalIslamicbanksin KazakhstanandMalaysia. Sukukhavebecomeoneofthemostprominent Islamicfinancefundingmechanismsutilizedin recentyears,andhaveprovenpopularininfra- structuredevelopmenttooffsetthepossibility ofcorruptioninpublictenders. Overthepastyear,sukukhavebeenannounced andissuedinSouthAfrica,Nigeria,theUK,theGulf,and SoutheastAsia.Sukukactivitydecreasedduringthe pandemic,butissuancestilloccurred,notably,inthecase ofRiyadh-basedWethaqissuingafintechsukuk,andthe IslamicDevelopmentBank’s$1.5billionsustainability sukuk. Numeroussocialimpact-relatedinvestmentsandiniti- ativesbackedbyIslamicbanksandinstitutionsarealso gainingtraction,fromgreensukuktoclimatebonds,to socialfinancingandzakatgovernance. This report estimates that the value of Islamic Finance assets increased by 13.9% in 2019 from $2.52 trillion to $2.88 trillion. Due to the impact of the COVID-19 crisis, the value of Islamic Finance assets is expected to show no growth in 2020, but is expected to rebound and grow at a 5-year CAGR of 5% from 2019 onwards to reach $3.69 trillion by 2024. 11 ISLAMIC FINANCE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 14. 0 2 4 6 8 12 10 14 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 1462 Islamic financial institutions globally $536 billion value of outstanding sukuk $137 billion value of Islamic funds Islamic Finance sector sizing data provided by ICD-Refinitiv Islamic Finance Development Indicator 2020 data. All other estimates including 'signals' by DinarStandard Research & Advisory. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. FDI figures based on UNCTAD 2019 data. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Islamic Finance (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 5% 5% Top 10 countries by Islamic finance assets (2019) Finance assets $4.93 billion in recorded Islamic finance investments 2019/20* USA: Robo-advisory platform, Wahed Invest, raising $25 million in a venture capital round led by Saudi Aramco Entrepreneurship Ventures. UAE: Noor Bank was acquired by Dubai Islamic Bank to become one of the largest Islamic banks, with assets exceeding $75 billion. DEALS Top countries with # of related deals Investments Investments Islamic fintech investments and financial institution consolidation through M&A is expected to continue 13.9 13.9 0 0 5.5 5.5 6.5 6.5 6.7 6.7 7.2 7.2 14 Indonesia 7 UAE 5 Kuwait 12 Others COVID-19 Impact Projections Projected 5-year CAGR of 5% (2019/24) reaching $3.69 trillion by 2024 (% YOY GROWTH, 2018/24)* Projected Islamic finance assets growth 38 TOTAL Represented by $2.88 trillion in Islamic finance assets globally (2019 est.)
- 15. UAE UAE $234.2 billion $234.2 billion Malaysia Malaysia $570.5 billion $570.5 billion Indonesia Indonesia $99.2 billion $99.2 billion Bangladesh Bangladesh $44.9 billion $44.9 billion 3 Iran Iran $698.2 billion $698.2 billion Saudi Arabia Saudi Arabia $629.4 billion $629.4 billion 7 10 1 2 9 Turkey Turkey $62.9 billion $62.9 billion 5 Qatar Qatar $143.9 billion $143.9 billion 6 Kuwait Kuwait $132.3 $132.3 billion 4 Bahrain Bahrain $95.6 billion $95.6 billion 8 UAE UAE $234.2 billion $234.2 billion Malaysia Malaysia $570.5 billion $570.5 billion Indonesia Indonesia $99.2 billion $99.2 billion Bangladesh Bangladesh $44.9 billion $44.9 billion 3 Iran Iran $698.2 billion $698.2 billion Saudi Arabia Saudi Arabia $629.4 billion $629.4 billion 7 10 1 2 9 Turkey Turkey $62.9 billion $62.9 billion 5 Qatar Qatar $143.9 billion $143.9 billion 6 Kuwait Kuwait $132.3 $132.3 billion 4 Bahrain Bahrain $95.6 billion $95.6 billion 8 Government Benchmarks 2. Saudi Arabia 1. Malaysia 3. UAE 4. Jordan 5. Bahrain FINANCIAL GOVERNANCE SOCIAL AWARENESS 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 ISLAMIC FINANCE - GIE INDICATOR RANKING (2019) GOVERNMENT BUSINESS/INVESTMENT Governments Governments supporting Islamic supporting Islamic fintech ecosystem fintech ecosystem Banks’ digitization Banks’ digitization Social finance Social finance growth growth (Waqf, Zakat) (Waqf, Zakat) Tokenization Tokenization of sukuks of sukuks Impact Investments/ Impact Investments/ ESG funds growing ESG funds growing Islamic finance Islamic finance regulations in regulations in new countries new countries Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 16. Muslim- Friendly Travel STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 14 MUSLIM -FRIENDLY TRAVEL
- 17. Thepandemicbroughtthetourismindustry,including Muslim-friendlytravel,toagrindinghalt,withtourismbeing oneofthemostadverselyaffectedeconomicsegments duetotravelrestrictions. Governmentshavescrambledtosupport airlinesandthebroadertourismecosystem whilestrugglingtostrikeabalancebetween preventingfurtherCOVID-19outbreaksand stimulatingtheeconomy. Formanycountries,tourismisaprimaryforeign currencyearner,andthelossofinflowingcash hashadasignificantimpact.Thisextendsto pilgrimage,withSaudiArabiacancelinghajj andumrahin2020.Toputthisinperspective, in2019,18millionpilgrimsvisitedtheKingdom, spendingaround$28billion.Anothersetback forthesectorwasthereschedulingoftheTokyo Olympicsto2021,withsuppliersinMalaysia,who wereintendedtocaterforMuslimathletesatthe event,settolosesome$300millioninpotential revenues. Investmentinthesectorhasnevertheless continued,althoughatalessconfidentratethan beforethepandemic.Indonesia-basedTraveloka hasraised$250millioninadditionalfunding,and UAE-basedtravel-techstartupHotelDataCloud secured$350,000inseedfunding. Meanwhiletravelcompanieshaveusedthe cessationinactivitytoupgradetechnology, particularlyartificialintelligence(AI),toenhance userexperiencesandimprovedatamanagment. ExamplesincludeLondon-basedonlinetravel agencyHalalTravels,whichstartedupin2019, andHalalBooking.com,whichdevelopedcustomdata- mappingtechnologythroughapartnershipwithExpedia. Whilethereisadiminishedoutlookfortourism,withthe expectationbeingthatthesectorwilladapttothe‘new normal’overthenextyearortwo,amuch-neededboost wasgiventothesectoratthebeginningof2020with thereleaseoftheStandardsandMetrologyInstitutefor IslamicCountries’(SMIIC)HalalTourismServicesstandard. Thisstandardprovidesguidelinesformanaginghalal tourismfacilitiesandservices. Muslim spend on travel increased by 2.7% in 2019 to $194 billion from $189 billion in 2018. With the impact of the COVID-19 crisis, Muslim spend on travel is expected to fall to $58 billion in 2020 and make a recovery to 2019 levels by 2023. Muslim consumer spending on travel is expected to grow at a 5-year CAGR of 1.4% from 2019 to 2024. 15 MUSLIM -FRIENDLY TRAVEL STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 18. -100 -80 -60 -40 -20 20 0 60 40 80 100 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 200.3 million of outbound Muslim travelers (2019) All estimates by DinarStandard Research & Advisory. Muslim outbound travel spend estimates & analysis by leveraging UNWTO and World Bank data as baseline. Projections base-lined using UNWTO forecasts. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Muslim-Friendly Travel 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 6.8 1.6 The thickness of the lines is proportional to the value of the country’s spending Top 5 Muslim travel destination countries (2019, inbound est. Muslim travelers) Top 5 outbound Muslim travel countries (2019, est. outbound spending) $340 million in recorded travel sector investments 2019/20* Indonesian OTA Traveloka secured a $250 million from Qatar Investment Authority and Singapore’s GIC. UK: HalalBooking, which allows users to book Muslim-friendly hotels and villas, raised $2.5 million. DEALS Top countries with # of related deals Investments Investments Weak outlook on investments in travel, with domestic travel as a key area of focus 2.7 2.7 -70 -70 75.9 75.9 79.4 79.4 6.2 6.2 6.5 6.5 12% Muslim spend 4 Indonesia 3 Malaysia 2 Turkey 5 Others All products/sectors COVID-19 Impact Projections Projected 5-year CAGR of 1.4% (2019/24) in consumer spending reaching $208 billion by 2024 (% YOY GROWTH, 2018/24)* Projected Muslim spend growth on outbound travel versus all halal products/ services Muslim-frienly travel 14 TOTAL $1.66 trillion outbound global travel Represented by $194 billion in outbound travel spending by 1.9 billion Muslims (2019 est.)
- 19. 5. Indonesia 5. Indonesia $11.2 billion $11.2 billion 2. 2. UAE UAE $17.2 billion $17.2 billion 3. Qatar 3. Qatar $14.2 billion $14.2 billion 4. Kuwait 4. Kuwait $13 billion $13 billion Russia Russia 5.6 million 5.6 million UAE UAE 6.2 million 6.2 million France France 4.9 million 4.9 million 1. Saudi Arabia 1. Saudi Arabia $24.3 billion $24.3 billion 5 2 Turkey Turkey 6.4 million 6.4 million Spain Spain 7.6 million 7.6 million 1 3 4 5. Indonesia 5. Indonesia $11.2 billion $11.2 billion 2. 2. UAE UAE $17.2 billion $17.2 billion 3. Qatar 3. Qatar $14.2 billion $14.2 billion 4. Kuwait 4. Kuwait $13 billion $13 billion Russia Russia 5.6 million 5.6 million UAE UAE 6.2 million 6.2 million France France 4.9 million 4.9 million 1. Saudi Arabia 1. Saudi Arabia $24.3 billion $24.3 billion 5 2 Turkey Turkey 6.4 million 6.4 million Spain Spain 7.6 million 7.6 million 1 3 4 Government Benchmarks 2. UAE 1. Malaysia 3. Turkey 4. Thaliand 5. Tunisia FINANCIAL GOVERNANCE SOCIAL AWARENESS 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 MUSLIM-FRIENDLY TRAVEL - GIE INDICATOR RANKING (2019) GOVERNMENT BUSINESS/INVESTMENT Tourism corridors Tourism corridors Domestic tourism Domestic tourism boost boost Tourism corridors Tourism corridors AI driven post- AI driven post- COVID-19 COVID-19 customer customer engagement engagement Industry pivots to Industry pivots to diversified services diversified services Halal tourism Halal tourism standards standards being drafted being drafted Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 20. Modest Fashion STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 18 MODEST FASHION
- 21. Modestfashionhadbeenmakingasplashonthehigh streets,online,andonthecatwalkuntilthefirstquarter of2020.TheCOVID-19pandemichitthe$2.2trillionglobal fashionindustryhard,withsalesfallingandretailers reducingbrick-and-mortaroutlets,withsomeshutting downaltogether. Modestfashioncompaniesalsofellvictimtothepandemic —suchasTheModist,aGulf-basedluxurye-commerce platform,andHijupUK,whichclosedafterjust18months ofoperation.AmoresubduedRamadanduringthe pandemicimpactedmodestfashionsales,astheholy monthistypicallythebiggestsalesperiodofthe yearinMuslim-majoritycountries. Despitethecircumstances,newlaunchestook place,andonlinesalesgainedheightenedimpor- tance,particularlyforfledglingandemerging brands.Brandswerealsokeentoexpandnew productlines,especiallysportsweargearedat themodestfashionsegment. Certainbrandsbuiltontherisingpopularityfor modestfashionwithrelatedinternetsearches up90%in2019.Thebroaderavailabilityof modestfashionisreflectedinmainstream brandsUniqloandBananaRepublicfeaturing hijabcollections,whilefashionmagazinessuch asCosmopolitanhaveshowcasedthedesignsof SafiyyaAbdallah’srange,Dulce.Malaysia’shijab branddUckcollaboratedwithDisneytobring outitsFrozen2collection,whichsoldoutwithin hours. Turkey’shighlysuccessfulmodestfashion e-commerceplatform,Modanisa,openedits largeststoreinIstanbul,whileinIndia,inter- nationalandlocalbrandshaveopenedmore stores,evidenceofthesector’sstronggrowth. InIndonesia,modestfashionisflourishing online,withanewplatformrecentlylaunched, Evermos,whichraised$8.25millioninseriesA funding.ItisnowsettocompetewithHijupand Tokopedia. Numerousbrandshaveenteredthemodest sportswearsegmentoverthepastyear,ranging fromDutchsportshijabbrandCapstersBV, recentlyacquiredbyMalaysia’sInnovatiaSdn Bhd,toEgypt’sSparkPerform,whichclothes Egyptianathletesatinternationalsportsevents. Amodestswimwearrangeformen,Zusaura,has alsobeenintroduced.Furtherproductdevel- opmentincludesPersonalProtectiveEquipment (PPE),suchasahijabforhealthcareworkers. Alternativesaleschannelsarealsobeingutilizedinline withchangesinconsumerbehavior.Forexample,Style Theory,adesignerclothingrentalplatforminIndonesia andSingapore,raised$15millioninseriesBfunding.Mod Markit-ThrifteditionwasheldduringMelbourneFashion Week,whichincludedasecond-handmarketformodest clothes. Modestfashionweekshavealsobecomemorewide- spread,witheventsheldoverthepastyearinMiami, Melbourne,Kigali,Nairobi,andTanzania. Muslim spend on apparel and footwear increased by 4.2% in 2019 to $277 billion. Iran, Turkey and Saudi Arabia rank as the top countries by spend and retain their positions from last year. Due to the impact of the COVID-19 crisis, Muslim spend is set to decrease by 2.9% in 2020 to $268 billion but a recovery to 2019 levels is expected in 2021. Muslim consumer spending is expected to grow at a 5-year CAGR of 2.4% between 2019 and 2024 to reach $311 billion in 2024. 19 MODEST FASHION STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 22. -10 -8 -6 -4 -2 2 0 6 4 8 10 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 The thickness of the lines is proportional to the value of the country’s exports Top 5 modest fashion Muslim consumer markets (2019) Top 5 countries exporting to OIC (2019) $29.3 billion of clothing exports to OIC* countries (2019) All estimates by DinarStandard Research & Advisory. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank’s ICP 2017 consumer data as baseline reference. Projections base-lined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Modest Fashion 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 4.8% 2.7% 4.2 4.2 -2.9 -2.9 4.2 4.2 3.4 3.4 3.5 3.5 4 4 $3.45 million in recorded modest-fashion investments 2019/20* 3 Egypt 1 Netherlands Malaysian-firm Innovacia acquired Dutch sports hijab pioneer, Capsters, for an undisclosed amount. Egypt’s Dice manufacturing, a producer of sports and casual wear for men and women, raised $3.4 million. DEALS Top countries with # of related deals Investments Investments There were few investments in apparel and modest fashion as the sector was deeply impacted by the pandemic All products/sectors COVID-19 Impact Projections Projected 5-year CAGR of 2.4% (2019/24) in consumer spending reaching $311 billion by 2024 (% YOY GROWTH, 2018/24)* Projected Muslim spend growth on clothing versus all halal products/ services Modest Fashion Represented by $277 billion of spending by 1.9 billion Muslims on clothing (2019 est.)
- 23. 3. India 3. India $2.8 billion $2.8 billion 5. Bangladesh 5. Bangladesh $1.4 billion $1.4 billion Turkey Turkey $28 billion $28 billion Indonesia Indonesia $16 billion $16 billion 2. Turkey 2. Turkey $3 billion $3 billion 1. China 1. China $11.5 billion $11.5 billion 3 Saudi Arabia Saudi Arabia $21 billion $21 billion 1 Iran Iran $53 billion $53 billion 5 2 Pakistan Pakistan $20 billion $20 billion 4 4. 4. UAE UAE $1.5 billion $1.5 billion 3. India 3. India $2.8 billion $2.8 billion 5. Bangladesh 5. Bangladesh $1.4 billion $1.4 billion Turkey Turkey $28 billion $28 billion Indonesia Indonesia $16 billion $16 billion 2. Turkey 2. Turkey $3 billion $3 billion 1. China 1. China $11.5 billion $11.5 billion 3 Saudi Arabia Saudi Arabia $21 billion $21 billion 1 Iran Iran $53 billion $53 billion 5 2 Pakistan Pakistan $20 billion $20 billion 4 4. 4. UAE UAE $1.5 billion $1.5 billion Government Benchmarks 2. Turkey 1. UAE 3. Indonesia 4. Malaysia 5. Spain MODEST FASHION - GIE INDICATOR RANKING (2019) FINANCIAL S O C I A L A W A R E N E S S 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 GOVERNMENT BUSINESS/INVESTMENT Niche categories: Niche categories: sportswear, GenZ sportswear, GenZ focus, wearables focus, wearables Government Government initiatives to boost initiatives to boost modest fashion modest fashion Ethical production Ethical production standards/regulations standards/regulations Emerging modest Emerging modest fashion influencers fashion influencers Continued Continued mainstream brands mainstream brands interest interest Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 24. Halal Pharmaceuticals STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 22 HALAL PHARMACEUTICALS
- 25. Thepandemichashighlightedtheshortcomingsofthe widerhalalpharmaceuticalecosystem.Governmentshave madecallsformorepharmaceuticalstobemanufactured locally,toavoidbeingnegativelyimpactedbysupplychain issuesintheeventoffuturepandemics.However,thereare notyetenoughhalal-certifiedmedicinesandingredients tocovertheseneeds. Universallyacceptedhalalstandardsarenotyetinplace, althoughtheOICregulatorybody,SMIIC,isworking towardsthem.Halalpharmaceuticalcertification expertiseisalsonotuptopar,particularlyforvaccines.This hasheldbackthedevelopmentofahalal-cer- tifiedCOVID-19vaccine—containingnoharam (non-permissible)ingredientssuchasporcine gelatinorthosederivedfromhumanfetuses— thatwouldbewelcomedby1.9billionMuslims. Promisingsignalsareafootinhalalpharmaceu- ticaldevelopment.AMalaysianconglomerateis developingtheworld’sfirsthalalbiosimilardrug, whilejointventuresbetweenSouthKorean, IndonesianandMalaysiancompaniesaredriving halalcertificationofpharmaceuticals.Indonesia, inparticular,isakeymarketdriver,withthe countryrequiringmandatoryhalallabelinginthe nextfewyears. Halalpharmacompaniesteamingupwith healthcarecompaniesisequallysettoimprove commercializationandmarketavailability. Privatesectorefforts,particularlyinMalaysia, toimprovebothpatients’andphysicians’ awarenessofreligiouslypermissibleoptionsfor Muslimpatientswillpropelfuturedemand. Thehalalhealthcaresectorisdoingwellinnutra- ceuticalsandvitamins,ofwhichtherehavebeen surgingsalesin2020.Demandforhalal-certified nutraceuticalsroseduringthepandemic,while halalcertificationbodiesreportedanuptickin applications. TheCOVID-19pandemicwasequallyadriver ofinnovationinthehealthcaresector.Apps werelaunched,includingaShariah-compliant telemedicinesolution,andhealthcarehijabsfor frontlineworkersintheUSAweredonatedbya modestfashionbrand. Healthcarestart-upsalsoattractedsignificant investorattention,buildingonstronginvestment in2019,particularlyintheMiddleEast. Withhealthcaregarneringrenewedfocusfromgovern- mentsduetothepandemic,andthepublicincreasingly healthconscious,thehalalpharmaceuticalsectorand widerecosystemispoisedformajorgrowth. Muslim spend on pharmaceuticals increased by 2.3% from $92 billion in 2018 to $94 billion in 2019. Due to the COVID-19 crisis, Muslim spend is set to decrease by 6.9% in 2020 to $87 billion. However, a recovery to 2019 levels is expected in 2021. Muslim consumer spending in the pharmaceutical sector is expected to increase at a CAGR of 2.3% from 2019 onwards to reach $105 billion by 2024. 23 HALAL PHARMACEUTICALS STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 26. 3. USA 3. USA $3.4 billion $3.4 billion 3 USA USA $7.3 billion $7.3 billion Algeria Algeria $3.9 billion $3.9 billion 5 3. USA 3. USA $3.4 billion $3.4 billion 3 USA USA $7.3 billion $7.3 billion Algeria Algeria $3.9 billion $3.9 billion 5 -10 -8 -6 -4 -2 2 0 6 4 8 10 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 $38.6 billion of Pharmaceuticals exports to OIC* countries (2019) All estimates by DinarStandard Research & Advisory. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank’s ICP 2017 consumer data as baseline reference. Projections base-lined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Halal Pharmaceuticals 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 5.7% 2.3% 2.3 2.3 -6.9 -6.9 7.1 7.1 3.7 3.7 4 4 4.3 4.3 All products/sectors Halal Pharmaceuticals Investments Investments Despite depressed global FDI, government led medicinal security investments supporting activity $157 million in halal-related pharmaceutical investments 2019/20* 4 Egypt 2 Indonesia 1 Kuwait Kuwait: $69 million investment in Kuwait Saudi Pharmaceutical by leading Gulf distributor, Mezzan Holding Egypt: Healthcare app Vezeeta raised $40 million in a series D round led by Gulf Capital DEALS Top countries with # of related deals COVID-19 Impact Projections Projected 5-year CAGR of 2.3% (2019/24) in consumer spending reaching $105 billion by 2024 The thickness of the lines is proportional to the value of the country’s exports Top 5 pharmaceuticals Muslim consumer markets (2019) Top 5 countries exporting to OIC (2019) (% YOY GROWTH, 2018/24)* 2 Others 9 TOTAL Projected Muslim spend growth on Pharmaceuticals versus all halal products/ services Represented by $94 billion of spending by 1.9 billion Muslims on pharmaceuticals (2019 est.)
- 27. 5. India 5. India $2.5 billion $2.5 billion 1. Germany 1. Germany $5.2 billion $5.2 billion 2 Saudi Saudi Arabia Arabia $8.1 $8.1 billion billion 1 Turkey Turkey $10 billion $10 billion 4. 4. Switzerland Switzerland $3.3 billion $3.3 billion 4 Indonesia Indonesia $5.4 billion $5.4 billion 2. France 2. France $4.6 billion $4.6 billion 5. India 5. India $2.5 billion $2.5 billion 1. Germany 1. Germany $5.2 billion $5.2 billion 2 Saudi Saudi Arabia Arabia $8.1 $8.1 billion billion 1 Turkey Turkey $10 billion $10 billion 4. 4. Switzerland Switzerland $3.3 billion $3.3 billion 4 Indonesia Indonesia $5.4 billion $5.4 billion 2. France 2. France $4.6 billion $4.6 billion Government Benchmarks 2. UAE 1. Malaysia 3. Singapore 4. Iran 5. Egypt FINANCIAL GOVERNANCE SOCIAL AWARENESS 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 HALAL PHARMA/ COSMETICS - GIE INDICATOR RANKING (2019) GOVERNMENT BUSINESS/INVESTMENT Medicine security Medicine security focus focus Supply chain Supply chain global shifts global shifts Nutraceuticals Nutraceuticals demand demand Indonesia, Saudi Arabia Indonesia, Saudi Arabia local manufacturing push local manufacturing push Telemedicine Telemedicine demand demand Stringent halal Stringent halal regulations regulations Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 28. Halal Cosmetics STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 26 HALAL COSMETICS
- 29. Theglobalcosmeticsindustryexperienceditsbest salesyearintheleaduptotheCOVID-19pandemic.New independentbrandswerehittingtheshelves,andthere wasagrowingtrendfornatural,organic,cruelty-freeand halal-certifiedcosmetics.Whenthepandemicreachedits height,salesdropped,particularlyatretailoutlets,while consumerbehaviorchangedduetosocialdistancingand thewearingoffacemasks. However,asconsumersadaptedtothe‘newnormal,’sales startedtorecover,withe-commerceamajordriverof sales.Brandswithoutastrongonlinepresencescrambled toimprovetheire-commerceanddigitalmarketingto betterconnectwithconsumers. Halalcosmeticsbrandshavesimilarlyadapted,inpartby tappingintoconsumerdemandtosupportindependent brandsandbymarketinginlocallanguages,especiallyin SoutheastAsia.Brandsalsorespondedtothepandemic bylaunchingproductrangesthatreflectednewconsumer trends.SpecialRamadanrangeswerealsoreleasedduring theholymonth—typicallyastrongsalesperiod— amidthepandemic. Ithasnonethelessbeenadifficultperiodfor bothfledglingandestablishedhalalcosmetics brands.Theyhavefacedstiffcompetitionfrom organicandnaturalbrands,aswellasmultina- tionalswithdeeperpocketswhoaremoreable torideoutthefinancialimpactofthepandemic. Atestamenttotheresilientand growing demandforhalalcosmeticsisthatnewbrands launchedpriortothepandemichavesurvived andthrived,suchastheUAE’sShadeMBeauty, whichenteredthecosmeticsspaceasthe foundersobservedanunder-servedmarket. Moreingredients’suppliershavealsobeenhalal certifiedoverthepastyear,aswerecosmetics companieskeenonenteringbothMuslim- minorityandMuslim-majoritymarkets,particu- larlyinIndonesia,Malaysia,andIndia.Indonesia isexpectedtobeamajordriverofgrowthfor halal-certifiedcosmetics,withthecountry ofover270millioninhabitantsrequiringhalal labellingby2024. Halalcosmeticsaregarneringmoreattentionin theexhibitionspace,becomingafixedfeatureat expos,whilecollaborationsbetweencosmetics companiesandresearchersintothecosmetic propertiesofgreenteaandplantsaresettodiversify productofferings. Halalcosmeticsbrandsalsoreflectsocietydemands forchange,with‘inclusivity’beingabuzzwordandcallin thebeautysectortobettercatertopeopleofdifferent ethnicities.Ethicaldemandsareequallybeingserved,such ascruelty-freeproductsthatcontainnoharam(forbidden) ingredientslikeporcinegelatin. This report presents cosmetics spending by Muslim consumers worldwide at $66 billion in 2019, a growth of 3.4% on 2018. In 2020, Muslim consumer spending is expected to drop by 2.5%, reaching $64 billion, and then grow to reach $76 billion by 2024 at a 5-year CAGR of 2.9%. 27 HALAL COSMETICS STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 30. 4. USA 4. USA $0.94 billion $0.94 billion 4. USA 4. USA $0.94 billion $0.94 billion -10 -8 -6 -4 -2 2 0 6 4 8 10 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 $16 billion of cosmetics exports to OIC* countries (2019) All estimates by DinarStandard Research & Advisory. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank's ICP 2017 consumer data as baseline reference. Projections base-lined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Halal Cosmetics 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 4.9% 2.9% All products/sectors Halal Cosmetics $125 million in halal-related cosmetics investments 2019/20* 2 Indonesia 1 Turkey Indonesia’s online cosmetics marketplace, Sociolla raised $98 million in series D and E co-led by Temasek and EV Growth. Turkey’s cosmetics company, Özen Kisisel Bakim Ürünleri Üretim A.S. was acquired by Japan’s Daio Paper Corporation for $26.7 million. DEALS Top countries with # of related deals COVID-19 Impact Projections Projected 5-year CAGR of 2.9% (2019/24) in consumer spending reaching $76 billion by 2024 Investments Investments Personal care and hygiene segments have supported investments in the sector 3.4 3.4 -2.5 -2.5 5.9 5.9 3.6 3.6 3.7 3.7 3.9 3.9 The thickness of the lines is proportional to the value of the country’s exports Top 5 cosmetics Muslim consumer markets (2019) Top 5 countries exporting to OIC (2019) (% YOY GROWTH, 2018/24)* Projected Muslim spend growth on cosmetics versus all halal products/ services Represented by $66 billion of spending by 1.9 billion Muslims on cosmetics (2019 est.)
- 31. 5. India 5. India $0.84 billion $0.84 billion 2. 2. UAE UAE $1.8 billion $1.8 billion Malaysia Malaysia $4 billion $4 billion Russia Russia $4 billion $4 billion Indonesia Indonesia $4 billion $4 billion 3. Germany 3. Germany $1 billion $1 billion 1. France 1. France $2.5 billion $2.5 billion 3 India India $6 billion $6 billion 2 1 5 Turkey Turkey $4 billion $4 billion 4 5. India 5. India $0.84 billion $0.84 billion 2. 2. UAE UAE $1.8 billion $1.8 billion Malaysia Malaysia $4 billion $4 billion Russia Russia $4 billion $4 billion Indonesia Indonesia $4 billion $4 billion 3. Germany 3. Germany $1 billion $1 billion 1. France 1. France $2.5 billion $2.5 billion 3 India India $6 billion $6 billion 2 1 5 Turkey Turkey $4 billion $4 billion 4 Government Benchmarks 2. UAE 1. Malaysia 3. Singapore 4. Iran 5. Egypt FINANCIAL GOVERNANCE SOCIAL AWARENESS 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 HALAL PHARMA/ COSMETICS - GIE INDICATOR RANKING (2019) GOVERNMENT BUSINESS/INVESTMENT Supply chain Supply chain global shifts global shifts Synergy with Synergy with modest fashion modest fashion ‘New normal’ ‘New normal’ beauty trends beauty trends Halal/ethical Halal/ethical cosmetic brands cosmetic brands emerging emerging Stringent halal Stringent halal regulations regulations Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 32. Islamic-Themed Media and Entertainment STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 30 ISLAMIC-THEMED MEDIA AND ENTERTAINMENT
- 33. Thepandemichasbeenbothacurseandablessingforthe mediasector.Itwasatryingperiodforvenuesdependent onphysicalattendance,fromcinemasandtheaters,to filmfestivalsandmusicalevents,aswellasforactual mediaproductionamidlockdownsandsocial distancing.Ontheflipside,mediaoutlets hadmoreofacaptiveaudience,withpeople spendingmoretimeathomeandonlineseeking entertainmentandstimulation. Aswithothersectors,therewasadigitalshift duetothepandemic,witheventssuchas theGlobalMuslimVirtualFilmFestivalheld online,whileentertainmentandeducational platformsextendedtheirvirtualpresencetoa wideraudience.Indeed,withmosquesclosedor participationrestrictedduringRamadanandEid AlAdha,demandforonlineseminars,lectures andsermonssurged.Governmentsandreligious authoritiesalsoadaptedbyutilizingonlinevideo platformsforRamadanandappstobook prayerslots. WithRamadanoccurringduringthepandemic— theMuslimworld’smostimportantmonthfor entertainment,religiousandculturalevents— viewershipfiguresreachedunprecedented levels.TVseriesinparticulardrewinthecrowds, withthemostwatchedprogram,Turkish historicaldramaDiriliş:Ertuğrul,attracting 133millionviewersinPakistan,whichbecame popularafterbeingprofessionallydubbed intoUrdu. Mainstreammediaoutlets,suchasCNN, FacebookandstreamingplatformNetflix respondedtoRamadanduringapandemicwith dedicatedseriesandpartnershipswithArabic digitalplatforms.Netflixalsoacquiredmore localizedcontenttocatertoitsdiverseview- ership,whileculturallyIslamicsuperheroesand cartoonswerelaunchedintheUSAandTurkey. Entrepreneurstookadvantageofthepandemic tolaunchappsandonlinegames,especiallyintheMiddle East.MorededicatedMuslim-themedTVchannels,as wellasastreamingplatform,Malaysia’sNurflix,werealso launched,signalinggrowingdemand,particularlyamong GenZandmillennials. However,whiletherehasbeensubstantialprogressin contentofferingsandaccessibility,Muslim-themedmedia isstillalargelyuntappedmarket,withawealthofopportu- nitiestotelluniversalstoriesinmultiplelanguages toayoungandgrowingMuslimpopulation. Muslim spend on media and recreation increased by 3.7% to $222 billion in 2019 from $214 billion in 2018. Due to the impact of the COVID-19 crisis, Muslim spend is set to decrease by 3.7% in 2020 to $214 billion. However, a strong recovery surpassing 2019 levels is expected in 2021. Muslim consumer spending on media is expected to grow at a rate of 3.9% from 2019 onwards to reach $270 billion in 2024. 31 ISLAMIC-THEMED MEDIA AND ENTERTAINMENT STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21
- 34. USA USA $22 billion $22 billion 2 USA USA $22 billion $22 billion 2 -10 -8 -6 -4 -2 2 0 6 4 8 10 2018/19 2018/19 2019/20 2019/20 2020/21 2020/21 2021/22 2021/22 2022/23 2022/23 2023/24 2023/24 $21 billion of media & recreation exports to OIC* countries (2019) All estimates by DinarStandard Research & Advisory. Muslim consumer spend estimates & analysis by DinarStandard leveraging World Bank's ICP 2017 consumer data as baseline reference. Projections base-lined using IMF Outlook from April 2020. Halal and related products exports based on ITC Trademap 2019 data. Investments (figures and individual deals) are based on a detailed scan of databases from CapitalIQ, Crunchbase, White & Case, KPMG and DinarStandard analysis from 1st August 2019 to 31st July 2020. Full methodology in appendix. OIC = Organization of Islamic Cooperation, 57 mostly Muslim-majority member countries. Media & Recreation 3.2 3.2 -8.1 -8.1 8 8 7.7 7.7 4.3 4.3 4.5 4.5 (2019/20) 2018/24 CAGR GROWTH % PROJECTION PRE-COVID-19 POST-COVID-19 5.3% 3.9% The thickness of the lines is proportional to the value of the country’s exports Top 5 media & recreation Muslim consumer markets (2019) Top 5 countries exporting to OIC (2019) $121 million in recorded media & recreation investments 2019/20* 10 Malaysia 6 Indonesia 4 UAE UAE-based Almentor.net, offering Arabic video- based education, raised $4.5 million, led by Sawari Ventures. Indonesian Gojek’s video streaming service, GoPlay, independently raised $15 million from Golden Gate Ventures and ZWC Partners. DEALS Top countries with # of related deals Investments Investments Demand for online media and recreation will drive more deals 3.7 3.7 -3.7 -3.7 7.3 7.3 5.2 5.2 5.5 5.5 5.8 5.8 All products/sectors COVID-19 Impact Projections Projected 5-year CAGR of 3.9% (2019/24) in consumer spending reaching $270 billion by 2024 (% YOY GROWTH, 2018/24)* Projected Muslim spend growth on media/recreation versus all halal products/services Media & Recreation 27 TOTAL Represented by $222 billion of spending by 1.9 billion Muslims on media & recreation (2019 est.)
- 35. 2. Japan 2. Japan $2.1 billion $2.1 billion 3. Thailand 3. Thailand $2 billion $2 billion 5. Germany 5. Germany $0.9 billion $0.9 billion 4. Korea 4. Korea $1.6 billion $1.6 billion 1. China 1. China $5.2 billion $5.2 billion Turkey Turkey $26 billion $26 billion 1 Indonesia Indonesia $22 billion $22 billion 3 5 Pakistan Pakistan $11 billion $11 billion Saudi Arabia Saudi Arabia $11 billion $11 billion 4 2. Japan 2. Japan $2.1 billion $2.1 billion 3. Thailand 3. Thailand $2 billion $2 billion 5. Germany 5. Germany $0.9 billion $0.9 billion 4. Korea 4. Korea $1.6 billion $1.6 billion 1. China 1. China $5.2 billion $5.2 billion Turkey Turkey $26 billion $26 billion 1 Indonesia Indonesia $22 billion $22 billion 3 5 Pakistan Pakistan $11 billion $11 billion Saudi Arabia Saudi Arabia $11 billion $11 billion 4 Government Benchmarks GOVERNMENT BUSINESS/INVESTMENT Pan-Islamic Pan-Islamic TV channel TV channel Muslim-themed Muslim-themed streaming platforms streaming platforms Online gaming Online gaming boom boom Muslim-themed TV Muslim-themed TV series and films series and films Government Government push to develop push to develop local media local media 2. Malaysia 1. UAE 3. Singapore 4. UK 5. Indonesia MEDIA & RECREATION - GIE INDICATOR RANKING (2019) FINANCIAL S O C I A L A W A R E N E S S 1 1 10 10 20 20 30 30 40 40 50 50 60 60 60 60 50 50 1 1 10 10 20 20 30 30 40 40 Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Signals of Opportunities Amidst the pandemic, multiple strong and weak signals of opportunities are emerging Small impact Big impact Weak signal Strong signal
- 36. PRODUCED BY: DinarStandard™isagrowthstrategyresearchand executionmanagementfirm,empoweringorganiza- tionsforprofitableandresponsibleglobalimpact. DinarStandardspecializesintheglobalhalal/ethical economy,governmentinnovation,andthesocialimpact space.Since2008,DinarStandardhassupportedover30 governmententities,investmentinstitutions,industry leaders,andmulti-lateralsfromover12countries worldwide.Itsuniquevalue-propositionisrootedin deliveringoriginalfactsandforesight-drivenclientimpact groundedinexcellenceandethics. dinarstandard.com IN PARTNERSHIP WITH: TheDubaiIslamicEconomyDevelopmentCentre(DIEDC) wasestablishedin2013tomakeDubaithe‘Capitalofthe IslamicEconomy,’asenvisionedbyHisHighnessSheikh MohammedBinRashidAlMaktoum,Vice-Presidentand PrimeMinisteroftheUAEandRulerofDubai. TheDIEDCisequippedwiththefinancial,administrative, andlegaltoolstopromoteeconomicactivitiescompatible withIslamiclawinDubai’sgoodsandfinancialservices sector,aswellasthenon-financialsector.Inthiscapacity, itconductsresearchandspecialiststudiestodetermine Shariah-compliantactivitycontributiontotheemirate’s grossdomesticproductandexplorehowtoextendthis contributiontoboosttheeconomy.TheDIEDCisalso mandatedtocreatenewproductsandlinesofserviceto lawfirmsspecializinginfinancestructuring. iedcdubai.ae DESIGN PARTNER: GouldStudioisastrategicdesignconsultancybasedin Sydney,Dubai&Jakarta.Since2003,thefirmhaspart- neredwithclientsgloballyrangingfromUnitedNations, DubaiGovernment&EtihadAirwaysto$100mIslamic Economystartups. gouldstudio.com IN PARTNERSHIP WITH: LaunchedinOctober2015,SalaamGateway(SG)isthe world’sleadingnewsandinsightsplatformontheglobal Islamiceconomy.ItcoversIslamicfinance,halal,and Islamiclifestylesectors,withaneyeonthekeyproducer andconsumermarkets.Itisforprofessionals,business owners,decision-makers,andpolicy-makerswhooperate infast-changingsocio-economicenvironmentsandwant reliableandaccuratenews,insights,data,andintelligence toinformtheirnextmoves. salaamgateway.com ISLAMIC FINANCE DATA PARTNER: Servingmorethan40,000institutionsinapproximately 190countries,Refinitivprovidesinformation,insights, andtechnologythatdriveinnovationandperformancein globalfinancialmarkets.Ourhistoryofintegrityenables ourcustomerstomakecriticaldecisionswithconfidence whileourbest-in-classdataandcutting-edgetechnol- ogiesenablegreateropportunity.Weallowthefinancial communitytotradesmarterandfaster,overcomeregu- latorychallengesandscaleintelligently. refinitiv.com Acknowledgments Salaam Gateway STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 34 ACKNOWLEDGEMENTS
- 37. Report Team REPORT STRATEGIC ADVISOR Rafi-uddinShikoh CEO&ManagingDirector,DinarStandard REPORT AUTHOR, HALAL FOOD, AND LEAD ANALYST SimeenMirza SeniorManager,DinarStandard REPORT COORDINATOR, AND TRAVEL ANALYST ReemElShafaki Director,GrowthStrategies,DinarStandard ISLAMIC FINANCE ANALYST AlfatihGessanPAryasantana SeniorAssociate,DinarStandard ISLAMIC FINANCE DATA RefinitivIslamicFinanceTeam FOOD INDUSTRY ADVISOR Dr.MohamedAli AssociatePartner,DinarStandard HALAL LIFESTYLE ANALYSTS PaulCochrane SeniorAssociate,DinarStandard AaliyaMia SeniorAssociate,DinarStandard ShariqFaraz Associate,DinarStandard HALAL PHARMACEUTICALS AND COSMETICS ANALYST PaulCochrane SeniorAssociate,DinarStandard SPECIAL FEATURES LEAD ImanAliLiaqat ResearchAnalyst,DinarStandard RESEARCH ANALYSTS SyedJahanzebHasann AhmedAbdulMoiz REPORT DESIGNER GouldStudio MAIN INFOGRAPHIC DESIGNER ÁngelMonroy @angel___monroy WewouldalsoliketothankalltheIndustryexpertsinterviewedforthisReport, asreferencedintheMethodologysection. 35 STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/21 ACKNOWLEDGEMENTS
- 40. PRODUCED BY: IN PARTNERSHIP WITH: SUPPORTED BY: