The global halal food and lifestyle sector is expected to grow at a CAGR of 6% by 2020, according to the State of the Global Islamic Economy Report 2015/2016, commissioned and supported by the Dubai Islamic Economy Development Centre (DIEDC) in partnership with Thomson Reuters and in collaboration with DinarStandard.
The global Muslim market spent US$142 billion on travel in 2014, and is expected to reach US$233 billion by 2020. The most popular destination countries for Muslim tourists are Malaysia, Turkey and the UAE, which is outpacing other countries in terms of hotel development. To meet that growth, new channels are being created, such as HalalBooking.com, a travel search and booking website for halal-conscious travellers.
Although the halal travel market segment is expected to grow at a CAGR of 8.6% by 2020, some investors are still reluctant to invest in "Muslim-friendly" hotels for fear of revenue loss associated with not serving alcohol. Banqueting, however, is considered a viable alternative revenue-generating option for Muslim-friendly hotels. According to Riyanto Sofyan, CEO of Sofyan Hotels, "The halal tourism industry is not limited to Muslims, but rather extols Islamic values that are universal and inclusive, helping to broaden our market reach and attract a wider customer base, regardless of religion."
The halal food market is expected to grow at a CAGR of 5.8% by 2020, with the demand for ethical treatment of animals alone resulting in a US$100 billion organic food market. Although the principle of treating animals humanely is embodied within the concept of halal food, educating Organisation of Islamic Cooperation (OIC) countries about the halal sector and its standards and accreditation continues to be a challenge.
The Muslim media and recreation sector has also seen an increase in demand, with new emerging media channels tailored for Muslims. An example of this is "Muslim Face", a new social media website initiative developed by Muslim entrepreneurs and aimed at bringing young Muslims together. This sector, expected to grow at a CAGR of 5.5% by 2020, is still facing the misperception that Islamic content is either religious or educational.
Contrary to the rest of the fashion industry, which is facing financial pressures as a result of global recession, the modest or Islamic fashion sector continues to expand. Islamic fashion accounts for about 11% of the global fashion industry today, and is expected to grow at a CAGR of 6% by 2020. Some of the key challenges facing the sector are the need to adopt a wider perspective when incorporating Islamic values throughout the modest fashion value chain, the lack of unified payment platforms, and variations in customs rules and regulations across countries.
In 2013, global Muslim spend in the pharmaceutical industry reached US$72 billion, and is expected to grow to US$103 billion by 2019. One of the major challenges facing the pharmaceuticals and personal care sector today is the lack of funding for research and development.
HE Majid Saif Al Ghurair, Chairman, Dubai Chamber, commented: "From clothing to food to pharmaceuticals, the demand is steadily growing and what is really needed at this point is information for the average Muslim consumer on what is available and where. This is where the State of the Global Islamic Economy Report will serve the discerning Islamic finance and halal lifestyle consumers."
Nadim Najjar, Managing Director of Thomson Reuters, Middle East and North Africa, said, "With impressive growth figures predicted over the next five years, diverse sectors within the halal lifestyle market are asserting themselves in the global economy, boosted by Muslim consumer buying power. This report will provide an invaluable tool for key stakeholders in navigating emerging trends in the industry."
The inaugural State Global Islamic Economy Report will be revealed before the Global Islamic Economy Summit (GIES). Held under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, the Global Islamic Economy Summit this year will bring together thinkers and business leaders to address these issues.