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Analyzing the Halal Market Size in Southeast Asia

18 Mar 2024 | Southeast Asia

The halal market size in Southeast Asia is witnessing dynamic growth, driven by key players such as Malaysia and Indonesia. These countries, with their substantial Muslim populations, are influencing Southeast Asia’s halal market and making significant contributions to global halal industry trends.

Muslim population

Source: https://ycpsolidiance.com/white-paper/halal-industry-in-southeast-asia

Malaysia: Pioneering the Global Halal Hub

According to the State of Global Islamic Economy Report (GIE) 2022, Malaysia ranked top in the halal category and has maintained this position for the 9th consecutive year. The country has emerged as the leading global halal hub, boasting an impressive annual export value of USD 8 billion for halal products. This export value constitutes approximately 5.1% of Malaysia's total exports.

With a Muslim population of 20.8 million accounting for 63.5% of the total population, Malaysia plays a pivotal role in shaping the halal industry trends. Malaysia's forecasted halal industry value by 2030 is an ambitious USD 113.2 billion, representing 2% of the forecasted global market value by the same year.

Key sectors driving Malaysia's halal market include halal food, cosmetics & personal care, and pharmaceuticals. In 2021, Malaysia ranked 5th in the halal cosmetic market, contributing USD 3.6 billion in consumer spending. Additionally, the pharmaceutical sector gained prominence, with Malaysia ranking second in the GIEI ranking and attracting foreign investments in the halal pharmaceutical space.

Other emerging sectors in Malaysia's halal industry include modest fashion and tourism, signaling diversified growth avenues for the country.

Indonesia: The Giant of Muslim Consumer Markets

With the world's largest Muslim population at 236 million, Indonesia holds significant influence in Southeast Asia’s halal market. The country's halal market value stands at an impressive USD 303.5 billion, reflecting its dominance and potential for further growth.

In 2020, Indonesia represented 16% of the global halal food & beverage industry, ranking first for the highest consumer spending globally. The top three consumer goods industries with the highest consumer spending in Indonesia are food, media, and modest fashion.

Islamic media, valued at USD 22.4 billion in consumer spending in 2021, has attracted substantial investments, with major acquisitions such as Google and Temasek Holdings acquiring Tokopedia's media arm for USD 350 million in 2020.

The modest fashion industry in Indonesia has witnessed remarkable growth, driven by influential designers and a shift in customer perception. Indonesia ranks 6th and 9th respectively as top OIC importers and exporters of fashion to OIC, with values of USD 1.2 billion and USD 0.4 billion.

Indonesia's halal pharmaceutical industry is responding to increased demand amid the COVID-19 pandemic. Investments are pouring into obtaining halal certifications for pharmaceutical products, with the government issuing mandatory certification requirements. In 2021, Indonesia ranked fourth in the pharmaceutical Muslim consumer market, valued at USD 5.4 billion.

As Southeast Asia's halal market continues to evolve, Malaysia and Indonesia emerge as powerhouses, contributing significantly to the region's growth and influencing global halal industry trends. The forecasted values, investment trends, and diversification into emerging sectors underscore the dynamic nature of the halal market in Southeast Asia, promising a future of sustained expansion and innovation.

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