According to the report by Alibaba.com in collaboration with the Malaysia External Trade Development Corporation (MATRADE), Indonesia ranks seventh as the country with the largest buyer base of halal products in the world, leading the Southeast Asian region.
Countries ranked one to six include the United States, Pakistan, Bangladesh, Egypt, the United Kingdom, and Saudi Arabia.
Not only does Indonesia stand out as a country with a large buyer base, but it is also recognized as one of the main suppliers of halal products due to its rich Islamic heritage and deep cultural understanding.
“Indonesia clearly has advantages in the halal product market because it has a large population, strict product standards, and many entrepreneurs operating in this field,” said Roger Luo, Head of Southeast Asia at Alibaba.com, on Wednesday (September 27).
The halal products that have recorded the highest growth in purchases include traditional Muslim clothing, scarves, skincare products, and snacks. The increasing demand for Muslim clothing is driven by the growing Muslim population and the desire for modest dress in accordance with cultural norms.
Additionally, purchases of hijabs and scarves have also increased, not only among Muslim women but also among non-Muslims who appreciate the style and versatility of scarves as accessories.
In the skincare industry, the demand for certified halal products has risen, as buyers seek natural and organic options. Consumers are looking for skincare products free from alcohol, animal-based ingredients, and other prohibited substances.
“As a result, certified halal skincare products have become a popular choice. With advancements in technology, online sales opportunities are now more accessible. We encourage Indonesian entrepreneurs to take advantage of export opportunities,” explained Luo.
Bank Indonesia (BI) projects that the halal value chain (HVC) sector in Indonesia will grow by 4.5-5.3 percent this year, encompassing sectors such as agriculture, halal food and beverages, Muslim fashion, and Muslim-friendly tourism. This figure is estimated to contribute more than 25 percent to the national economy.
Wahyu Purnama, Director of the Islamic Economy and Finance Department at BI, explained that the Indonesia Sharia Economic Festival (ISEF) scheduled for October 25-29, 2023, will strengthen the development of the sharia economy and finance. During the event, BI collaborates with PT Halal Expo Indonesia (HEI), which partners strategically with the Indonesian Muslim Entrepreneurs Community (KPMI) to facilitate business matching.
“This will strengthen the synergy between the government and business actors in developing the sharia economy to realize Indonesia’s vision as the world’s halal center by 2024,” he stated.
Wahyu also noted that the Global Islamic Economy Indicator 2022 places Indonesia fourth in the largest sharia economy, following Malaysia, Saudi Arabia, and the United Arab Emirates (UAE). By category, Indonesia ranks second in halal food, third in Muslim fashion, sixth in sharia finance, and ninth in halal pharmaceuticals and cosmetics.
According to the Islamic Finance Development Indicator (IFDI), Indonesia has seen a significant increase in its ranking over the past five years, moving from tenth place in 2018 to third place in 2023.
“Moreover, Indonesia has achieved a remarkable first place in the Global Muslim Travel Index (GMTI) in 2023,” he added.
Other achievements can be observed in the total assets of sharia finance, which have grown by an average of 11.3 percent over the last six years. The market share of sharia finance in the national finance sector has also increased from 8.5 percent to 11 percent during the same period.
Additionally, the establishment of three Halal Industrial Zones (KIH) in Banten, East Java, and the Riau Islands serves as an essential foundation for positioning Indonesia as a Global Halal Hub. Data from the Ministry of Trade shows that total halal product exports reached USD 15.87 billion in 2022.
