- Malaysia, UAE and Bahrain lead GIEI indicator and Islamic economy markets in 2016.
- Global expenditure of Muslim consumers on food and lifestyle sectors grew from previous years' estimates to US$1.9 trillion at the end of 2015
- Islamic finance assets estimates at US$2 trillion at the end of 2015
For the fourth consecutive year, Thomson Reuters, in partnership with the Dubai Islamic Economy Development Centre (DIEDC) and in collaboration with DinarStandard has presented key findings from the State of the Global Islamic Economy Report (SGIE) and shared the Global Islamic Economy Indicator (GIEI) 2016/2017.
Released in the lead-up to the Global Islamic Economy Summit 2016 (GIES), set to take place on October 11 and 12 in Dubai, the report states that the Islamic economy is driven by young Muslims asserting their values, and who require companies to provide products and services that meet their faith-based needs. They are no longer niche segments in the global economy when the Islamic economy is estimated to be worth US$1.9 trillion and the Islamic finance sector has around US$2 trillion in assets as of 2015.
The report provides an overview on a number of emerging trends across different sectors of the Islamic economy, including the halal food sector, Islamic finance, halal lifestyle, Islamic education and healthcare. In addition, the report also highlights key local and global findings of the Global Islamic Economy Indicator (GIEI), a numeric measure representing the overall health and growth of the Islamic economy across 73 countries. Malaysia, UAE and Bahrain lead the GIEI indicator and Islamic economy markets in 2016.
In a first for this Report, 172 industry leaders were surveyed on their sector’s performance. Businesses confirm that the aggregate Islamic economy is a high-growth segment, with 69% considering sector performance to be good or excellent for them, and 86% of respondents either optimistic or very optimistic about future prospects. Another initiative for this Report series has been the tracking of Millennial consumers’ sentiment covering the Islamic economy using social media data analysis. Nearly half a million interactions were analysed, and 76% of the sentiment was positive.
The report has found that food and beverage tops Muslim spend by category, at US$1.17 trillion in 2015, followed by clothing and apparel at US$243 billion, media and recreation at US$189 billion, travel at US$151 billion, and spending on pharmaceuticals and cosmetics at US$78 billion. In another first in this report, the estimated revenue generated by halal-certified food and beverage companies worldwide is US$415 billion.
Halal food, the largest Islamic economy pillar by revenue, has shown clear signs of maturity with increased private equity investments in the sector. Upgrades in regulations are also occurring, with the introduction of accreditation to oversee certifiers set to reduce complexity and encourage more players to enter the halal food industry. Muslim spend on food and beverages is expected to reach US$1.9 trillion by 2021.
The Islamic finance sector has shown robust growth and increasing sophistication. This has been coupled by the emergence of crowdfunding and platforms. While the sector has been held back by a lack of awareness of Islamic finance product offerings, there is considerable opportunity for sector growth to reach US$3.3 trillion by 2021.
Halal travel continues to broaden its reach with tremendous growth in halal beach resorts, the launch of several dedicated airlines and the launch of the Muslim answer to Airbnb, Bookhalalhomes. There is also a TripAdvisor equivalent, Tripfez. While halal travel is still a niche sector it is building momentum, and is expected to grow with Muslim spend on outbound travel expected to reach US$243 billion by 2021.
Modest fashion is gaining mainstream interest with several retailers and brands such as Dolce & Gabbana, Uniqlo and Burberry entering the industry and several notable investments driving the sector forward. Spend on modest fashion is projected to reach US$368 billion by 2021.
The halal pharmaceutical and cosmetics sector continues to expand as awareness about ingredients rises and new product development, such as water-permeable nail polish, the development of halal vaccines and new ranges of nutraceuticals. Muslim spend on pharmaceutical and cosmetics products is expected to reach US$213 billion by 2021 in aggregate.
Halal media and recreation is embracing new genres. Muslim spend is expected to reach US$262 billion by 2021.
HE Majid Saif Al Ghurair, Chairman, Dubai Chamber and Board Member of the Dubai Islamic Economy Development Centre, said: “The Islamic economy continues to mature, growing more complex and more stable each passing year. The sector is proving itself to be one of the most viable solutions to the stagnation that is plaguing global markets. This is where the Global Islamic Economy Summit can play a productive role, gathering decision makers and key stakeholders in one high-profile event to exchange knowledge and insights, enabling them to synergistically work together to drive the sector forward and achieve sustainable economic growth.”
HE added: “The State of the Global Islamic Economy Report puts matters into perspective, proving, with numbers, the staggering growth and immense potential of the Islamic economy.”
Abdulla Mohammed Al Awar, Chief Executive Officer of Dubai Islamic Economy Development Centre, said: “For the fourth consecutive year, the State of the Global Islamic Economy Report presents new facts that further strengthen our conviction in Islamic economy’s ethical and regulatory framework and its ability to drive global economic growth.
“A core challenge for the Islamic economy is the need to motivate more Muslims across the globe, especially the youth, to participate in developing this ecosystem and play an integral role in the production process. In doing so, Muslims can transform from being the largest consumer base in the world to a sizeable production base capable of achieving a more sustainable future.”
Nadim Najjar, MD, Middle East and North Africa, Thomson Reuters said, “(The) Islamic economy is one of the fastest growing tranches of the global economy. The convergence between the Islamic economic sectors is strongly expected to enhance the Islamic economy space going forward. This annual report is now a point of reference for professionals and industry players looking at the current and forecast trends in this area.”
The Thomson Reuters State of Global Islamic Economy 2016/17 report defines the Islamic economy and provides a view of its future potential to facilitate investments and industry growth. This annual report is a barometer of the health and development of the Islamic economy industry worldwide, based on the Global Islamic Economy Indicator.
The report includes interviews with key market players and industry stakeholders expressing their views about current challenges and potential opportunities. It also measures the gaps and opportunities in the market and provides global Islamic economy sector value profile for Muslim consumers.
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