The emerging halal cosmetic and personal care market Personal Care March 2012

1. Murray Hunter – University Malaysia Perlis ANALYSIS
The emerging Halal cosmetic
and personal care market
At a time when many markets are
reaching saturation point, Muslims are
becoming much more concerned
consumers, creating some of the fastest
growing consumer segments in the world.
This represents a major growth
opportunity for cosmetic and personal
care companies. Halal products are very
quickly entering the mainstream markets
within Europe and the United States. In
addition the ‘Halal’ concept is becoming
much more sophisticated in the Middle
East and some Asian countries. Muslim
consumer Halal awareness has widened
from being concerned with meat-based
products a decade ago to a wide range
of products today. Muslim consumers are
seeking Halal integrity of processed foods,
beverages, pharmaceuticals, insurance,
travel, leather products, and even
entertainment. This has also spread to a
growing awareness about cosmetics and Figure 1: The concept of Halal in relation to HACCP and GMP.
personal care products, where recent
research has cited that more than 20% have been considered Halal due to their in these two markets are shown in Table 1
of Muslim consumers are concerned predominately Muslim populations.2 About and Table 2.6
about Halal issues with the products half these sales are in the Middle East, The markets listed in the Table 1 vary
they are using.1 with US$2.1 billion sales in Saudi Arabia greatly in the stage of development and are
Halal personal care products in the alone.3 Although per-capita consumption relatively heterogeneous due to differing
market today include hair shampoos, rates are not as high in other Islamic individual country tastes and preferences,
conditioners, bath and shower gels, markets, sales are growing around 15% although specific markets will tend to be
cleansers, creams, lotions, talc and baby per annum according to the author’s own homogeneous due to similar cultural,
powders, toners, make up, perfumes, eau estimate. Halal or Islamic cosmetics are historical and social consumption traits.
de colognes and oral care products. In now available in many places, including Markets like Indonesia, Pakistan,
contrast to personal care, cosmetic onboard sales on Saudi Airlines,4 Bangladesh, Nigeria, Iraq, Sudan,
market growth is not uniform and slightly supermarkets (including in Europe and the Uzbekistan etc., have low per capita
slower than personal care segments, as US), specialty Halal shops and widely incomes, where aggregate consumption
modesty has an important influence on through the internet. Some manufacturers of many consumer items would be very low,
Muslim female consumers. However this have integrated the concepts of Halal, until some further development takes
varies according to the country and organic and fairtrade into their products in place. Despite the relative affluence of the
upbringing where some women wear a the European market.5 UAE and other Arab Gulf States, in some
full length style robe and veil while others Given that one person in five is Muslim cases supply chains are still typically third
do not. in the world and Muslims in Western world. In Asia, rural and urban populations
countries are becoming more aware of have vastly differing aspirations and
Market size Islamic teachings, the Halal cosmetic values, and South Asian Muslims speak
There are various estimates about the market should continue to grow solidly. a multitude of different languages and
current size of the Halal cosmetic market There are two major parts of the potential practice different customs. We also see
ranging from US$5-14 billion sales per certified Halal market, country markets the Muslims of Northern Africa are vastly
annum. These estimates probably vary where the Muslim population make up different in dress and custom from the
due to the different definitions given to the majority and country markets where Muslims of Turkey and Iran for example.
what constitute Halal products, where in Muslim consumers are a minority group. Some Muslims identify more strongly with
some markets, particularly in countries This represents around 20% of the Western values than others, therefore
like Indonesia and Malaysia, all products global population. The major countries different markets will have different needs.
March 2012 P E R S O N A L C A R E 37

2. ANALYSIS
Table 1: Markets where the Islamic population is the dominant group.
Niche markets
The major countries where the Muslim
Ranked by Muslim GDP at purchasing price parity population is the minority are also
Rank Country Total Muslim Muslim Muslim GDP GDP potentially substantial markets for Halal
population population population USD (PPP) per capita certified products, representing large
(%) (billion) USD (PPP) market segment potentials (Table 2).
The US, Russia, China, France and
1 Turkey 71,892,808 99 71,173,879 879.12 12,900 Germany rank among the top Islamic
2 Indonesia 237,512,352 88 207,000,105 771.075 3,725 economies according to aggregate
3 Iran 65,875,224 98 64,557,719 737.94 10,624 Islamic GDP figures. Recent reports
4 Saudi Arabia 28,146,656 100 28,146,656 564.6 23,243 indicate that Halal sales in the US are
increasing around 80% per year, where a
5 Pakistan 172,800,048 97 167,616,046 397.7 2,600
number of new retail outlets specialising
6 Egypt 81,713,520 90 73,542,168 363.6 5,500 in Halal products are increasing. A&P ,
7 Algeria 33,769,668 99 33,431,971 222.5 6,500 Loblaws, Food Basics and Wal-Mart are
8 Malaysia 25,274,132 60.4 15,265,575 215.9 13,316 allocating space for Halal products in
9 Bangladesh 153,546,896 90 138,192,206 186 1,300 their stores.7 Many of the other countries
down the list represent very small
10 UAE 4,621,399 96 4,436,543 160.6 37,300
markets. However, in Europe and the
11 Nigeria 146,255,312 50 73,127,656 146.35 2,035
Middle East, per capita consumption
12 Morocco 34,343,220 99 33,999,787 124 4,100 of cosmetics is high.8 Possibilities exist
13 Kuwait 2,596,799 85 2,207,279 110.5 39,305 that in some countries there may be
14 Albania 3,619,778 70 2,533,845 13,94 6,300 potentially lucrative niches.
15 Iraq 28,221,180 97 27,374,544 99.23 3,600
There is one important point that
should be made here. Islam has no
16 Kazakhstan 15,340,533 57 8,744,103 95.5 11,100
geographical boundaries, thus diversity
17 Syria 19,747,586 90 17,772,827 78.3 4,500 rather than homogeneity is the key to
18 Tunisia 10,383,577 98 10,175,905 75.4 7,500 this market where faith is the only
19 Libya 6,173,579 97 5,988,371 72.5 12,300 common bonding factor. Even as Muslims
20 Azerbaijan 8,177,717 95 7,768,831 62.2 7,700
lean towards Western style consumption
and lifestyles, they are embracing their
Table 2: Markets where the Islamic population is a minority group.
faith with much more reverence than
perhaps previous generations that had
Ranked by Muslim GDP at purchasing price parity to struggle to survive. Muslim obligation
Rank Country Total Muslim Muslim Muslim GDP GDP under the Tawhid (the relationship
population population population USD (PPP) per capita between man and God) is something
(%) (billion) USD (PPP) that enters into everyday life and as a
consequence, Muslim consumers are
1 USA 303,824,640 3.5 10,633,862 487 45,800 seeking products and services that are
2 India 1,147,995,904 13.4 153,831,451 415.3 2,700 Syar’iah compliant (the path shown
3 Russia 140,702,096 10.5 14,633,017 215.1 14,700 by God). However on the other hand,
4 China 1,330,044,544 3.0 39,901,336 211.5 5,300 some research shows that approximately
20% of Muslim consumers do not look
5 France 64,057,792 7.5 4,804,334 159.5 33,200
for Halal certifications when purchasing
6 Germany 82,369,552 3.7 3,047,673 104.2 34,200 a product and that the majority of
7 Thailand 58,851,357 14.0 8,239,190 65 7,900 consumers will buy products that do
8 UK 60,943,912 2.7 1,645,485 57.75 35,100 not have the logo if there are no
9 Japan 125,449,703 1.0 1,254,497 42.1 33,600 alternatives.9 More research is required
in this area.
10 Italy 57,460,274 2.4 1,379,047 41.92 30,400
Central to the Syar’iah are the
11 Philippines 74,480,848 14.0 10,427,319 35.4 3,400
concepts of Halal and Toyyibaan, which
12 Netherlands 15,568,034 5.4 840,674 32.4 38,500 govern all the economic activities of man
13 Singapore 3,396,121 17.0 577,477 28.7 49,700 in production and consumption of wealth,
14 Canada 33,212,696 1.9 631,041 24.2 38,400 where certain means of gaining a
15 Israel 5,421,995 14.0 759,079 19.58 25,800
livelihood are declared unlawful.10 Halal
means lawful or permitted for Muslims,11
16 Spain 40,491,052 1.5 607,365 18.3 30,100
a concept that is much wider than food
17 Angola 10,366,031 25 2,591,508 14.5 5,600 issues. It concerns whether operations
18 Austria 8,205,533 4.5 369,248 14.2 38,400 and procedures are undertaken according
19 Kenya 28,176,686 29.5 8,312,122 14.13 1,700 to the Syar’iah.12 Toyyibaan is an even
20 Belgium 10,258,762 3.6 369,315 13 35,300
wider concept than Halal, which means
good, clean, wholesome, ethical in the
21 Poland 38,633,912 2.0 772,678 12.6 16,300
Islamic concept. Under the concept of
22 Hungary 10,106,017 6.0 606,361 11.5 19,000 Toyyibaan, food and other products must
23 Australia 21,007,310 1.5 315,109 11.4 36,300 be clean, safe, nutritious, healthy and
balanced.13 Toyyibaan would also mean
38 P E R S O N A L C A R E March 2012

3. ANALYSIS
law (see Table 3). This causes much
uneasiness among many Muslims as they
feel they are violating Islamic teachings by
using such products. In addition, through
advances in biotechnology, new ingredients
are being formulated into products where
Halal status is unknown. It is important to
the majority of the Muslim community that
some system is in place to assure them
that the products they purchase and
consume are lawful under Islam.
Forbidden ingredients
There are a number of ingredients which
Muslims cannot consume in any form,
which include:
ɀ Pork or pork by-products.
ɀ Animals that are dead or dying prior to
Figure 2: Strong Halal cosmetic competition in Malaysia with many philosophical slaughter.
and technical issues to resolve. ɀ Blood and blood by-products.
ɀ Carnivorous animals.
that agriculture must be undertaken take a holistic approach to comply, not ɀ Birds of prey.
within a sustainable regime of practices,14 just the launch of a new product or ɀ Land animals without external ears.
raw materials should be produced brand. ɀ Alcohol.
sustainably, and business should be done Increasing market internationalisation ɀ Animals killed in the name of anything
with good intentions.15 Therefore in the means that new product choices are other than Allah (God).
strict sense of these concepts, Toyyibaan available to consumers from companies
influences management styles, human and service providers which consumers Muslims living as a minority in a non-
resources policies, business ethics, raw do not know and are yet to trust. Many Islamic society have a number of problems
material selection, and manufacturing products utilise animal based product identifying what items are Halal and Haram
methods. This means that entering the formulations, which may or may not have (forbidden in Islam), without product
Islamic market requires a company to been slaughtered according to Islamic certification. For example, gelatine, lard
March 2012 P E R S O N A L C A R E 39

4. ANALYSIS
and tallow can be either Halal or integration system with a positive Halal cosmetics is still low within the Muslim
non-Halal, depending upon the source ingredient list, a procurement and community. Muslim consumers are
and method of processing. Cross manufacturing procedure certification and increasing in affluence and beginning to
contamination is a major problem in supply chain tracking system called HAL- focus upon their religious obligations that
stores and particularly restaurants where Q, converging GMP HACCP Halal, and
, , demand for Halal cosmetics is set to
pork is also served. Therefore from the Toyyibaan into a single set of increase exponentially. Muslim
Muslim consumer standpoint: procedures.21 These advances will solve consumers would be expected to exhibit
ɀ Products must be produced without many Halal integrity issues now allowing strong loyalty to trusted Halal and
any forbidden ingredients. much easier world trade with a trusted Toyyibaan certified products over non-
ɀ Products must be proved to be in the certification and tracking system. compliant products based on behaviour
interests of the consumers’ health in other Muslim markets. In addition to
and wellbeing. Conclusion Syar’iah compliance, Halal products will
ɀ Products must be clean and hygienic, In a world that is becoming more require brand building. However, how this
have supply chain integrity.16 spiritually conscious, awareness of Halal will be done within an industry depending
ɀ Products must benefit those who
produced them. Table 3: Some raw materials that are of concern to Muslim consumers.
ɀ Products must benefit the community
they came from.17 Albumen Sometimes used as a coagulating agent and protein in products
ɀ Products and the materials that make and usually derived from egg whites.
up these products must be traceable Allantoin Sometimes used in creams and lotions as a wound treating agent
from the origin, to have total and derived from uric acid from cows and other mammals.
confidence (as shown in Fig. 1).18
Ambergris Used as warm fresh sea-like notes and fixative in some fine
An emerging industry of Halal certification fragrances and derived from the intestines of whales
bodies has been created to attempt to Amino acids Used as ascetic ingredients (protein builders in nature) in shampoos
verify these issues. and sometimes derived from animal sources.
Methods of discovering ‘Haram Arachidonic acid An unsaturated fatty acid used in some skin creams and lotions as an
impurities’ in products are rapidly eczema and rash soother and derived from animal livers.
improving. Now the type of animals raw
materials are derived from can be Cholesterol A steroid alcohol found in all animal fats and egg yolks sometimes
identified using polymerase chain used in eye creams and shampoos, etc.
reaction (PCR) which greatly improves the Collagen and elastin Proteins derived from animal tissues.
potential for Halal integrity, allowing the Cystine A sulphur containing amino acid used as a nutritional supplement,
development of Halal supply chains and in emollients, hair treatment, and anti-aging products, derived from
product tracking. The Halal certification animal sources.
process involves:
ɀ Halal accreditation should be done Ethanol Alcohol which is forbidden to be consumed in Islam. It is widely
with an Islamic Association with a debated whether alcohol should be allowed in personal care and
good international reputation. cosmetic formulations.
ɀ All processes must comply with Gelatine Thickener & emulsifier used in shampoos, facemasks, and other
requirements under the Syar’iah. cosmetics, derived from cow and pig ligament, skin and bones.
ɀ All ingredients must be checked as to Glycerine A by-product of soap manufacture used in cosmetics, toothpastes,
their suitability to be certified Halal. All soaps, ointments, and medicines, of concern when derived from
ingredients must be certified Halal
tallow-based soaps.
before the product can be certified
Halal. Hydrolysed Sometimes used in shampoos and other hair treatments.
ɀ Any Haram (unlawful products) must animal protein
be processed in separate facilities and Keratin A protein used in shampoos, hair rinses and permanent wave
never come into contact with Halal solutions derived from hooves, horns, feathers, and hair of
certifiable products. various animals.
ɀ Halal and products considered Haram
Lactic acid Used a preservative in the formation of plasticizers derived by
can never be stored together.19
bacterial fermentation of sour milk, etc.
Thailand is taking the lead with their Lanolin An emollient used in skin care products derived from wool.
world class Halal Science centre at Lard Used in shaving creams, soaps, and cosmetics and derived
Chulalongkorn University in Bangkok from hog fat.
established in 1994.20 The centre Lecithin Used in eye creams, lipsticks, hand lotions, soaps, and shampoos,
focuses on developing standards, Haram being derived from either egg yolks or soybeans.
ingredient detection for certification
purposes, production system Myristic acid An acid used in shampoos, creams and cosmetics which can be
development with a Halal-GMP/HACCP derived from both plants and animals.
framework, and consumer information Tallow, tallow fatty Used in cosmetic and personal care formulations as surfactants and
services as well as research. The Halal acids and alcohols usually derived from animal fat.
centre has recently developed a Vitamin A Used in cosmetics and personal care products and can be derived
completely integrated approach to Halal from both plant and animal sources.
integrity through a supply chain
40 P E R S O N A L C A R E March 2012

5. on glamour as a brand attribute to an
overly modest set of consumers, still
remains to be seen.
Halal issues involved with cosmetics
The rise and rise of
and personal care products are far from
being totally agreed upon and without
non-alcoholic perfumes
skeptical criticisms. For example, there
are different schools of thought about Fine fragrances have a long history with The non-alcoholic fine fragrance
whether Islamic teachings prohibit the Arabs since ancient times and this industry has grown from a small
alcohol use on the body outside oral connection can still be seen with the specialised market where a few traders
consumption. Not all Muslims are in agarwood trade and ‘attar’ traders in imported concentrates from France, which
agreement over this as many of the Egypt, Tunisia, Syria, Jordan, Gulf States, they diluted and bottled, for sale at night
blogs22 and comments at the end of and Lebanon. This ‘attar’ trade has markets and shopping centres to over a
online articles show.23 Advertising and become modernised in Indonesia, US$800 million industry at retail level
marketing methods are also leading Malaysia, and Singapore with companies today. It is still growing tremendously.
to criticisms as the billboard shown in offering non-alcoholic ‘knock offs’ of the Originally the industry ‘copied’ and
Figure 2 is ambiguous in what it is big name fine fragrances. Conventional imitated the popular fine fragrances of
actually promoting to the consumer. fine perfumes usually contain 70%-80% the world, but today companies are
As we have seen with the ‘Arab of high pharmaceutical grade ethanol as a developing their own localised scents, own
Spring’, Muslims in many countries are carrier, with parfum de toilette or eau de brandings and developing loyal customer
now engaging in debate about what form parfum up to 90% ethanol. Ethanol acts followings. Non-alcoholic fine fragrance
of society and government they should as a carrier for fine fragrances, has a fits well with the colourful flowery fashion
have in the future, where interpretation cooling effect on the skin, and assists the of Malaysia and persona of the modern
of religious doctrine and openness to odour radiate from the skin through Malay woman. Fragrance is seen as an
outside influences are being redefined as evapouration. However Muslim consumers important accessory where creative
we write. There is little doubt that the frown upon using alcohol on their skin in marketing companies develop personality
control of outside influences will be less line with their beliefs, and seek based lines matched to the colours of
than before as satellite TV and the alternatives. Instead of using ethanol, their fashions through direct marketing
internet are being freed up. How this non-alcoholic perfumes are water-based. channels. This lucrative market niche has
equates to the future demand of Some even utilise apricot kernel, and not been left to the locals. Astute French
cosmetics and awareness about jojoba oils to bring a more natural companies have been seen entering this
composition is yet to be fully known. opulence to the fragrance. market bringing with it a European flare.
However one thing is certain, the Muslim
market will gradually represent 15%-20%
of the total market – something that science, industry and entrepreneurship: a Ummah. In: Saifuddeen SM, Mohd. Salleh S,
cannot be ignored. focus on the Asia-Pacific region. New York: Sobian A. Food and Technological Progress: An
As a final word, the objective of this Nova, 2009. Islamic Perspective, Kuala Lumpur, MPH
article was to skim through some of the 7 Burgmann T. Growing Muslim population Publishing 2006: 173.
issues related to the market, supply pushing companies to produce products they 15 Al-Qur’an (7:58)
chain, and ethical issues concerning can eat. The Toronto Star, 22 July 2007. 16 Sungkar I. Developing the halal value proposition
Halal cosmetics and personal care www.thestar.com/business/article/238551 from farm to folk. In: Proceedings of the 3rd
products in the market today. The (accessed 31 January 2012) Malaysian International Agro-Bio Business
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substantial market segment is growing summary. European Commission, Directorate approach. SME-Entrepreneurship Global
and should be taken seriously, not General for Enterprise and Industry, November Conference 2008, 4 July 2008, Monash
necessarily for market positioning 2007. ec.europa.eu/enterprise/cosmetics/doc University, Australia.
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