Muslim spending across food, beverage, and lifestyle sectors is estimated to have reached $2 trillion in 2016, accounting for 11.9 percent of global expenditure, according to a new report.
By category, F&B leads Muslim spend at $1.24 trillion, followed by clothing and apparel at $254 billion, media and entertainment at $198 billion, travel at $169 billion, and spending on pharmaceuticals and cosmetics at $83 billion and $57.4 billion respectively.
The figures were revealed by Dubai Islamic Economy Development Centre (DIEDC) in its State of the Global Islamic Economy Report 2017-2018 report published in collaboration with Thomson Reuters.
The report found Halal food to be the largest and most diverse sector of the Islamic economy. New entrants have come into the market, and product offerings have firmly moved beyond being meat-focused to include candy, ready-made meals, snacks and children’s food.
Established players are expanding at home and abroad, through franchising. Multinationals have also made major investments in Muslim-majority markets, anticipating rising demand. Meanwhile, private equity investment and sovereign wealth funds have been particularly active, and a number of Halal investment funds are in development, the report added.
The International Halal Accreditation Forum, established in the UAE in 2017 and overseeing 19 certifiers globally, is a further positive development for the industry, it noted.
With Muslim spend on food and beverages is growing at nearly double that of global growth, expected to reach $1.93 trillion by 2022.
The report said the Islamic finance sector continues to evolve and the sukuk industry continues to mature, with a number of debut sukuk issuances over the past year and more in the pipeline. Assets were estimated at over $2 trillion in 2016, and are expected to surge to $3.8 trillion by 2022.
Family-friendly travel is also getting its moment in the sun. The number of Muslims travelling is at an all-time high, the report said, adding that Halal hotel chains are also emerging and family-friendly attractions are being developed in the GCC.
Muslims spend on travel was $169 billion in 2016, and is forecast to reach $283 billion by 2022.
As for modest fashion, designer brands and boutiques are developing new lines and Ramadan collections. Modest athletic apparel is a notably trendy segment, with Nike getting in on the act as well as Danish label Hummel. Muslim spend on clothing was $254 billion in 2016, and is forecast to reach $373 billion by 2022.
The report said Halal media and recreation is challenging perceptions and adapting to the needs of Muslim millennials. New films are being released, TV channels are going on air, and mainstream media is increasingly embracing Islamic content.
Muslim spend on media and entertainment was $198 billion in 2016, and is forecast to reach $281 billion by 2022.
The Halal pharmaceuticals and cosmetics sector is also quickly moving out of its niche status, especially Halal cosmetics.
Multinational companies are recognising the segment’s potential, notably US-based Orly teaming up with Muslimgirl.com to create and launch six Halal nail polishes, just in time for Ramadan.
Muslims spend on pharmaceuticals was $83 billion in 2016, and is forecast to reach $132 billion by 2022, while spend on cosmetics was estimated at $57.4 billion, and to reach $82 billion by 2022.
Sultan bin Saeed Al Mansouri, UAE Minister of Economy and chairman of DIEDC, said: “This year’s Global Islamic Economy Indicator testifies to the success of the UAE in pioneering an appropriate Islamic economy ecosystem within a short period, when compared with other nations that have been active in fostering this niche economic system - especially in the halal industries space.
"Sharia-compliant sectors are central to the Islamic economic system and attract the most investment – thereby facilitating an Islamic economy-friendly environment.”
He added: “The decline in oil prices has led to a fundamental shift in the nature of the economies of the GCC region and led to a greater focus in developing non-oil productive sectors. This trend has positioned the halal industry and trade in a prime position as growth drivers of the economy for the coming years.”
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