The Global Islamic Economy

-
25-26 November 2013 was the Global Islamic Economy Summit held in Dubai. I was part of a panel discussion on controlling supply chain and logistics integrity. As I have attended various Islamic and Halal conferences all over the world, this Summit was of a different order. This summit brought together global halal industry and Islamic finance experts, well orchestrated by the organisers, and about 3,000 people attending. From this summit it is clear that the Middle East, led by Dubai, want to take a more active role in developing and shaping the Global Islamic Economy. Dubai has drafted a strategic roadmap to become the global hub of the Islamic economy, wanting to capture 10% of the global halal trade. It was also clear from the various speakers at this summit, that halal requires an integral supply chain approach, something which is slowly recognised by the brand owners and manufacturers of halal food, cosmetics and pharmaceutical products.

According to the State of the Global Islamic Economy 2013 Report by Thomson Reuters, the halal industry USD 1.62 trillion in 2012, is expected to reach USD 2.47 trillion by 2018. Islamic financial assets are currently estimated to be USD 1.35 trillion in total disclosed assets (2012) and growing 15-20% a year in most core markets according to this report. The key drivers according to the Thomson Reuter report are both global market drivers and Islamic market drivers. Global market drivers are the participation of global companies, growth of emerging markets, growth of ethical consumption and the role of internet, social media and mobile revolution. Islamic market drivers are the large/young/growing Muslim population, importance of Islamic values driven consumption, emerging/frontier markets, and growth of intra-OIC trade.

The Islamic Economy consist of the following pillars: 1) halal food; 2) halal cosmetics; 3) halal pharmaceuticals; 4) halal logistics; 5) Islamic finance; 6) clothing & fashion; 7) travel; and 8) media & recreation. It is important for companies active in the halal industry to recognise that halal goes through an evolution and that halal needs to be addressed all the way. A tradition product orientation (get the product halal certified) is not sufficient anymore, but requires a halal supply chain and value chain approach in order to give the Muslim consumer what he really wants. This would allow companies in the halal industry/Islamic economy to strengthen their brand and increase their business. The Global Islamic Economy is a large and fast growing economy that few companies can afford to ignore.




Comments

Post a Comment

Popular posts from this blog

The International Halal Logistics Standard: IHIAS 0100:2010

-
As Halal is extending towards supply chain management (similar to food safety, where halal integrity is secured from source to the point of consumer purchase : the supermarket or restaurant) it is important to look at halal logistics. Logistics assists supply chains in connecting the individual suppliers, supplier of suppliers, customers, customers of customers to the final consumer: creating a supply network bringing the final halal product to the consumer. Today, even with a simple product as bread, the flour might be imported from China, butter from New Zealand, bread improvers from the Netherlands, seeds from Iran, etc. Supply chains are therefore  complex and international . Complex supply chains , due to the many different supply chain partners bring vulnerabilities along, requiring a ROBUST design in order to protect the halal integrity as good as possible. HalalSecure.com  for example is assisting brand owners for example to better organise and protect their halal s...
Read more

The Halal Supply Chain Model

-
Image
In establishing an integrated halal supply chain (from 'farm to fork' or more precise from 'source to the point of consumer purchase') and optimise the performance of your halal supply chain, it is important to realise what are the components or so called 'logistics building blocks' of a halal supply chain. The figure below presents and overview of the logistics building blocks in organising your halal supply chain. I will discuss each component accordingly. By developing an integrated halal supply chain, the start is the right intention. Halal needs commitment from the top management through a halal policy , which acts as basis for the organisation of the supply chain. There should be a strategic fit between the corporate strategy and the halal policy. Amongst others, the halal policy addresses (1) the responsibility of an organisation in protecting the halal integrity along the supply chain; (2) the scope of halal certification of the organisation; (3) ...
Read more

Introducing the Concept of Halal Reputation Capital

-
Image
Introduction A robust halal reputation holds both intangible and tangible advantages in Muslim markets, resonating with stakeholders such as Muslim consumers, societies, employees, and shareholders. Building a strong halal reputation is essential for fostering positive sentiments toward the organisation and its brands at various levels, ensuring sustainability and market presence. Beyond the direct impact on sales, a solid halal reputation attracts top-tier talent and garners positive social media coverage. This corporate standing should be considered a vital component of market capitalisation, coining the term “halal reputation capital,” which proves to be invaluable for companies, ranging from millions for local enterprises to billions for multinational corporations. Surprisingly, most businesses operating in Muslim markets lack strategies to measure and fortify their halal reputation capital. Why Halal Reputation Capital Matters In the past decade, numerous local and international b...
Read more