Indonesia’s Halal Industry: Redefining Traditions in Travel, Fashion, and Business

Posted 13.07. 2017 by Cekindo

Indonesia’s Halal Industry: Redefining Traditions in Travel, Fashion, and Business Review by Siti Junima Faradella on 13. 7. 2017 Company Registration in Indonesia, Market Research in Indonesia, Work Permit in Indonesia, Product Registration in Indonesia, Local Partner Selection in Indonesia, Trade Mission in Indonesia, Company Formation in Indonesia, Company Establishment in Indonesia, Company Set Up in Indonesia, Payroll Outsourcing in Indonesia, Tax Reporting in Indonesia, Medical Product Registration in Indonesia, Medical Device Registration in Indonesia, Cosmetic Registration in Indonesia, Food Supplement Registration in Indonesia.
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Despite the recognition for being the world’s largest Muslim-majority country, Indonesia has not fully developed its halal industry, a market that holds great potential. Noting this critical oversight, Southeast Asian startups are now zeroing in on the Muslim market.  

A study conducted by the Center of Reform on Economics (CORE) Indonesia said Muslims and halal registration, a potentially growing consumer group and their equally increasing spending power, have long been put on the sidelines on the progressive online world—but all that is changing now.

CORE researcher Akhmad Akbar Susamto stated the need to have a roadmap to develop the halal industry in the archipelago, with its goals completely in sync with the objectives stipulated under the existing National Industry Development Masterplan (RIPIN).

Based on the State of the Global Islamic Finance Report, Muslims who wield disposable income, categorically recognised as the Islamic market, are slated to be worth more than $2 trillion and around $3.735 trillion by 2019. Similarly, a Thomson Reuters’ study showed how in 2015, Muslims worldwide spent more than US$1.9 trillion on different products, with $1.17 trillion spent on food and beverages alone and $243 billion on clothing, the two top products on the said list.

Based on the State of the Global Islamic Finance Report, Muslims who wield disposable income, categorically recognised as the Islamic market, are slated to be worth more than $2 trillion and around $3.735 trillion by 2019.

See: Most Common Questions about Halal Certificate

Today, startups in the Southeast Asian region are focusing majority of their efforts on the Muslim market.

Fazal Balhardeen zeroed in on coming up with the Halal Trip app after realizing that the leisure and hospitality industry does not seem appealing to Muslim travellers. The app provides guides, tips, and other helpful features for Muslims travelling to new cities and on the lookout for halal food, mosques, and the likes.

Malaysian pop star and November Culture founder Yuna Zarari is largely involved with the promotion of halal-friendly fashion commodities including faux leather culottes, tapered pants, a large selection of colorful headscarves, and long sleeve dresses, among others, with the current online marketplace being hungry for power sleeves.

Malaysian Rushdi Siddiqui launched Zilzar, the Muslim version of Amazon, which offers a comprehensive selection of halal products, including electronic qur’ans, prayer beads, food, and many more.  Zilzar approximated the worldwide Muslim food market at over $1.2 billion in 2015.

City University Business School’s Professor of Finance Meziane Lefer however explains that while the current business landscape is most conducive for Muslims to get into startups, there’s a roster of lists that they are required to comply with when establishing a business.  Lefer emphasises that all Islamic startups geared at providing halal services to for Muslim customers should be allocated opportunities that comply with Sharia law.

Zilzar founder Siddiqui, in an interview with the Guardian, talked about his goal of shaking up the marketplace and “empowering the consumer and creating employment . . . [where] people can sell their own products.”

While opening up a huge opportunity for Indonesia, the proposed law requiring all halal products to be certified by 2019 also proves to be a challenge.  Jakarta halal consultant Dr Muhamed Hosen said that with the law being mandatory, the government will have to ensure strict enforcement and providing the infrastructure to evaluate certification across Indonesia and other remote areas will prove to be expensive.

Facebook co-founder Eduardo Savarin cites how Southeast Asia is undeniably one of the world’s fastest-growing online market, explaining why Indonesia is pooling major resources into the startup community.  Zilzar founder Siddiqui, in an interview with the Guardian, talked about his goal of shaking up the marketplace and “empowering the consumer and creating employment . . . [where] people can sell their own products.”

With the startup scene in Indonesia and its neighboring Southeast Asian countries being roused by these newly realized market of gargantuan potential, the halal industry, it should not come as a surprise as these countries gear up on investing more on these startups centering on the Muslim communities as their primary market.

Cekindo boasts of years of experience in market entry services to foreign investors and companies in Indonesia. Let us help you prepare your business’ 2019 timeline on marketing, accounting, payroll, product registration, etc. We offer a full suite of services covering business setup, business process outsourcing, local representation, among others.

Image credits: Foodnavigator-Asia, ReutersBe2C2

Get in touch with our friendly consultants in Cekindo, and we’d be happy to discuss with you how we can successfully work together to realize your business goals.



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