Nowadays, Muslims are more aware of what goes into their bodies. As such, Muslim consumers are more discerning on their purchases of pharmaceuticals and cosmetics, which are absorbed by the body. This paves the way for growth of the Halal pharmaceutical and cosmetics industry, worth US$83 billion and US$57 billion respectively in 2016. These represent a growth of six and two percent respectively compared to the previous year.
The Halal pharmaceutical industry is expected to grow eight percent year-on-year to reach US$132 billion by 2022, while the Halal cosmetics industry is expected to grow six percent year-on-year in the same period, to reach US$82 billion by 2022.
Pharmaceutical companies like Pharmaniaga and AJ Pharma are spearheading innovation in the Halal pharmaceutical centre, investing substantial amounts into the development of Halal vaccines, while multinational cosmetics companies are looking at Halal certification more seriously for products they enter in the export market and are expanding their product range, for example Orly which collaborated with Muslimgirl.com to launch a line of Halal nail polishes last year.
The recently concluded Malaysia International Halal Showcase (MIHAS) 2018 saw 11.8% of its sales come from the pharmaceuticals and cosmetics sector, equivalent to RM108.04 million, making it the third top performing sector in the showcase. The trade show featured several Halal pharmaceutical and cosmetics brands such as Cosmoderm, Charms & Starglow, Le Farra, CCM Pharmaceuticals, Expo Pharma, Chung Mei Biopharma, and many more.
In a presentation on the first day of MIHAS 2018, Thomson Reuters senior research analyst Abdulaziz Goni said while Halal nutraceuticals have been identified as a major growth segment, the Halal generics could broaden access to drugs in the Organisation of Islamic Countries (OIC) markets. He said companies involved in the Halal pharmaceutical industry can benefit from dedicated free zones for the Halal pharmaceutical sector and substantial opportunities exist for Shariah-compliant funding as well as research and development.
With mainstream retailers and cosmetic companies embracing the Halal term, Halal cosmetics are addressing broader lifestyle product opportunities. More Gulf Cooperation Council (GCC) perfumes are becoming Halal certified, while Halal regulations have been extended to cosmetic products, and there have also been advancements in Halal testing.
According to the State of the Global Islamic Economy Report 2017/18, the United Arab Emirates (UAE) has the best developed Islamic economy for Halal pharmaceuticals and cosmetics, followed by Singapore and Malaysia. This is based on four criteria – trade, governance, awareness and social.
In the last two years, the Halal pharmaceutical industry saw several key developments. Among these was the world’s first Halal license for prescription medicine given out by Malaysia’s religious authority, JAKIM, to Chemical Company of Malaysia (CCM) last year. Meanwhile, Indonesia is gearing up for mandatory Halal products this year, and UAE’s ESMA will require all Halal imports to be certified.
Within the Halal pharmaceutical sector, Halal nutraceuticals has been identified as a major growth segment that can experience rapid growth if supported by patient, strategic investment. With robust marketing and investment from financial and corporate entities alike, this opportunity can be realised.
Meanwhile, for the Halal cosmetics sector, while progress is afoot, consumer confusion about Halal certification and a lack of awareness about the concept of Halal has stymied potential growth in the sector, especially in terms of exports. The move towards more a universal standard should help bolster this segment, otherwise Halal Cosmetics could lose out to the burgeoning global demand for organic, natural and Ayurvedic cosmetics products.